The Influence Of Enterprise's Trade Credit And Short-term Bank Loans On Cash Holdings

Financing structure has been a hot and difficult topic in corporate finance research.Funds can be divided into internal financing and external financing according to their sources.As one of the most important sources of internal financing,cash holdings is one of the most important financial decisions.The short-term external debt financing of Chinese enterprises is mainly from the short-term bank loans and trade credit.From the financing structure theory of "Trade-Off Theory","Pecking Order Theory" and "Agency Theory",we can get,as enterprises the most important endogenous sources of financing for the cash and short-term external debt financing are the main source of short-term bank loans and trade credit with each other is usually influence each other,and is dynamic.Therefore,in the study of the relationship between corporate cash holdings and bank short-term loans,trade credit,preferably from a dynamic perspective,and the need to consider the existence of endogenous.Though a few scholars,such as Kling et al.(2014)carried out some analysis on the relations in consideration of endogenous situation,from a dynamic perspective,but concluded only Granger Causality among the three,did not lead to concrete impact each other,no further discussion.While their study focused on developed countries and their research mainly pays attention to the capital market more perfect,for emerging market countries,especially in the transition economy in our country,the conclusions do not necessarily appropriate,and domestic related research is rarely reported.In this paper,firstly from the dynamic perspective,and considering the existence of endogenous case,respectively to whole,state-owned and private listed companies as a sample,by constructing cash holdings,short-term bank loans,providing trade credit and access to trade credit a Panel VAR Model and Dynamic Panel Data Model,revealing the relationship between the four factors and the degree of specific impact Secondly,the introduction of the business environment,monetary policy,the nature of equity and other control variables may affect,respectively,examined the relationship between the following groups of factors,including:trade credit(receivables and payables and their subdivision items)and cash holdings;short-term bank loans and cash holdings;trade credit(receivables and payables and their subdivision items)and short-term bank loans,and use incremental cash to replace cash holdings for the robustness test.The main conclusions of this paper are as follows:Firstly,through the Panel VAR Analysis and Granger Causality Test,Impulse Response Analysis and Variance Decomposition,respectively analyzes the whole,state-owned and private listed companies' short-term bank loans,providing trade credit,access to trade credit and cash holdings of the relationship between them.Found among the four factors exist obvious influence each other,particularly cash holdings significantly influenced by the other three factors lag 1,and between state-owned and private listed companies there are significant differences.Secondly,introduced short-term bank loans,obtaining trade credit,providing trade credit and cash holdings four factors of current and lag 1,then add other possible effects of the control variables,by constructing a dynamic panel model,using System GMM Estimation(SYS GMM)method(set the main explanatory variables as endogenous variables)to analyze the relationship between the four factors and degree of influence each other.The results showed that four factors existing obvious relationship,especially the cash holdings and the other three factors lag 1 were significantly positive correlation,and with the other three factors of current significantly negative correlation.Thirdly,dynamic panel model' System GMM Estimation(SYS GMM)analysis results also show that,the whole sample of listed companies in cash holdings to adjust a half period of 2 years,the private listed companies are 1.8 years,and the state-owned listed companies for 2.07 years.In other words,the level of cash holdings of listed companies changed from one equilibrium state to another equilibrium state the time required to for 4 years,the private listed companies in 3.6 years,the state-owned listed companies need to adjust the speed of 4.14 years,the private listed companies slightly faster than the state-owned listed companies.Fourthly,the introduction of the providing and obtaining trade credit and their subdivision items,also joined the monetary policy,the business environment,to discuss the different monetary policies and the business environment,affect providing and obtaining trade credit and the subdivision impact on cash holdings,and found different trade credit subdivision have different effects on corporate cash holdings,and this affected by the adjustment of monetary policy and the business environment due to the different subdivision of trade credit items differ.Fifthly,the influence of providing trade credit on cash holdings is more regular,from notes receivable,accounts receivable and prepaid accounts with cash holdings of the relevant coefficient of view,the whole,private and state-owned listed companies are should be the coefficients of the accounts receivable(absolute value),notes receivable secondly,prepayments minimum,that is the impact on the cash holdings by the three,is the largest accounts receivable,notes receivable,followed by a minimum prepayment.Sixthly,we investigate the relationship between enterprises short-term bank loanswith cash holdings and incremental cash.The results showed that the short-term bank loans current and lag 1 can significantly affect corporate cash holding and the amount of cash increase;further introduction of monetary policy and financial development level,we find that the private listed companies in the current bank short-term loans and cash holding significant negative correlation,and the incremental cash nosignificant correlation;on the contrary,there is no significant correlation between short-term bank loans and cash holdings of state-owned listed companies,but significantly positive correlation with cash increment.