Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/317532 
Year of Publication: 
2021
Citation: 
[Journal:] Journal of Business Economics and Management (JBEM) [ISSN:] 2029-4433 [Volume:] 22 [Issue:] 6 [Year:] 2021 [Pages:] 1456-1475
Publisher: 
Vilnius Gediminas Technical University, Vilnius
Abstract: 
This study investigates the substitution financing effect of suppliers' trade credit on customers' trade-credit using Chinese listed firms from 2009 to 2018. Results verify the substitution financing effect of suppliers' trade credit on customers' trade credit, indicating that firms with higher suppliers' trade credit have lower customers' trade credit. Moreover, suppliers' trade-credit substitutes customers' trade credit by alleviating financing constraints. Customer concentration weakens the substitution financing relation. Finally, the substitution financing effect of customers' trade credit on bank credit is more pronounced than that of suppliers' trade credit. As exogenous policy shock, the capital market liberalization has no significant impact on the substitution financing relation between heterogeneous trade credits. This study reveals that trade credit is heterogeneous rather than homogeneous. The substitution financing effect also exists in trade credit inside, which expands the existing literature's understanding of trade credit and the substitution financing theory's connotation.
Subjects: 
substitution financing effect
trade credit
suppliers' trade credit
customers' trade credit
financing constraints
customer concentration
capital market liberalization
JEL: 
D53
G23
G32
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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