The Study On The Relationship Between Trade Credit And Bank Loan

According to the credit rationing theory of trade credit, credit rationing may result in the substitution relationship between trade credit and bank loan. Credit rationing generally exists in China, and it has some connection with ownership of company and area. The credit rationing in private companies are stronger than that in state-owned companies, and the credit rationing would be stronger in areas of lower level of financial development or higher extent of government intervention. This paper examines whether the substitution relationship between accounting payable and bank loan exists in china listed companies, and research how the relationship between accounting payable and bank loan would change in different lever of credit rationing based on company's ownership and institutional environment. The result shows there is a substitution relationship between accounting payable and bank loan, and the substitution effect will change in different institution environment. In the private listed companies, or in areas where the level of financial development is lower, or in areas where the extent of government intervention is higher, the substitution relationship between accounting payable and bank loan is stronger. These confirm the substitution relationship is primarily caused by demand effect, which is caused by funding required. These results not only enrich the related study on the relationship between trade credit and bank loan, but also help to understand the institutional roots which affect the relationship between trade credit and bank loan deeply.