 Dig the treasure nearby: The impact of local supplier preference on trade credit financingZhixin Duan and Mingsheng Hu International Review of Economics & Finance, 2024, vol. 89, issue PA, 629-650 Abstract: This study focuses on the location characteristics of the supply chain, and investigates the impact of whether or not firms have local suppliers on their trade credit financing and the moderating effect of institutional factors. By exploiting the manually identified data of suppliers of Chinese listed firms, we find that the preference of local suppliers promotes the acquisition of trade credit financing. Moreover, the effects are more pronounced among firms in regions with a lower degree of marketization. Further analysis shows that low information asymmetry and high trust between local suppliers and firms are plausible mechanisms. We also examine the economic consequences of trade credit; firms with local suppliers have considerable access to trade credit, thereby contributing to firm performance and bank credit. Keywords: Local suppliers; Trade credit financing; Marketization; Consequence (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:89:y:2024:i:pa:p:629-650 DOI: 10.1016/j.iref.2023.07.057 Access Statistics for this article International Review of Economics & Finance is currently edited by H. Beladi and C. Chen More articles in International Review of Economics & Finance from Elsevier |
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