An Empirical Study Of The Supplier-customer Market Power, Commercial Credit And Corporate Performance

As a short-term financing tool commercial credit play an irreplaceable role in easing the financing constraints faced by corporates and optimizing corporates capital management. The relationship between the upstream and downstream corporates in the supply chain has always been the focus of the academic, commercial credit also account for a large proportion in the transaction between corporates with suppliers and customers. But the corporates while provide or obtain commercial credit in the the supply chain would be decided by suppliers market forces and customers market forces. But what is the relationship between them? And now the competition between corporates has already entered the supply chain, The relative position of the corporates with suppliers and customers can profoundly influence the corporates obtain and provide commercial credit. The commercial credit as an important financing tool, naturally will also affect the corporate performance, But how they interact with each other? In order to promote corporate performance, how the corporate deal with the relationship between suppliers and customers? These issues are worthy of us to discuss deeply and test with the empirical method.So in this article, the market power(divided into market power supplier and customer market power), commercial credit is combined with the enterprise performance analysis. Then respectively study suppliers market power and customers market power influence on commercial credit, at the same time, respectively analyzes suppliers market power and customers market power impact on corporate performance, also we verify the effect of trade credit. By selecting Shenzhen A-share listed companies in 2006 to 2011 data, we made an empirical analysis to explain the relationship between them, research shows that:(1) The suppliers own more market power, the corporate obtains less commercial credit from the suppliers, and the corporate performance will be worse; Then obtaining commercial credit is negatively correlated with corporate performance, The commercial credit obtained from suppliers act as an intermediary role in the relationship between the suppliers market forces and the corporate performance.(2) The customers own more market power, the corporate need to provide more commercial credit to customers, at the same time, the corporate obtain less commercial credit from the customers; For state-owned enterprises, the more market power the customer have, the corporate performance will decline, but for non-state corporates the relationship between them is not obvious.(3)For state-owned corporates, providing commercial credit to customers is positively related to corporate performance, and providing commercial credit to customers also play an intermediary role in the relationship between the customers market power and corporate performance; But for the non-state-owned corporates, providing commercial credit to customers does not improve corporate performance, the intermediary effect is not obvious.(4) From the angle of the whole supply chain, we can see that there exists a clear unspoken rule in commercial credit between supply chain. The corporate obtain more commercial credit from the suppliers, then the customers will require corporate to provide more commercial credit to them, there is a consistent delinquencies phenomenon among the entire supply chain.