Research On The Impact Of Trade Credit On Bank Credit Financing

Trade credit is generated in the supply chain activities of enterprises.It is the right of the upstream enterprises to delay the payment of the purchase price based on the cooperation relationship between the enterprises and the credit status of the buyer's enterprise.It is an informal contractual behavior between enterprises that deals with commodity labor transactions.Trade credit can play the role of short-term financial communication,ease the degree of bank credit financing constraints,and is a new channel to raise short-term debt funds.Especially in the context of China's special system,the formation of the financial system is short,the mechanisms are not mature enough,and large commercial banks are basically state-owned banks,which makes some enterprises suffer from a series of complicated factors when seeking debt financing from banks.Such as the nature of the property rights of enterprises,the strength of profitability,the severity of bank loan conditions,and changes in national monetary policy.Both trade credit and bank credit belong to the short-term debt financing source of enterprises,but compared with bank credit funds,trade credit has the advantages of simple financing and sustainable acquisition,so it is highly valued by enterprises.The reason why trade credit and bank credit are widespread is because the survival and development of enterprises cannot be separated from the support of funds.However,the growth process of an enterprise has certain regularity.There are differences in business characteristics and financial characteristics between different life cycle stages.Due to the inherent characteristics of development and strategic objectives,the demand for trade credit and bank credit funds is different.Moreover,the financing ability of the enterprise is closely related to factors such as asset size,market position,and debt service ability.This in turn makes the financing ability of the company different at different stages of development,which has an impact on the ability of enterprises to obtain trade credit and bank credit.In the process of seeking funds,when there are two financing methods that can meet the capital needs of enterprises,enterprises often choose financing methods with simple financing procedures and low cost of use.There are differences in the cost and availability of trade credit and bank credit in different stages of development.The difference in financing needs,the difference in financing capacity and the choice of financing methods make the impact of trade credit on bank credit in different life cycle stages worth exploring.Research on corporate finance and trade credit is rich,but there are few studies on the impact of trade credit on bank credit from the perspective of business life cycle.Based on the microscopic perspective of the enterprise life cycle,this paper discusses the following threeproblems on the basis of theoretical analysis and the method of empirical test:(1)What degree of bank credit financing constraints are faced by enterprises in different life cycle stages.(2)Whether the use of trade credit is universal in listed companies in China,and the degree of utilization of trade credit by enterprises in each life cycle stage.(3)What is the impact of trade credit on bank credit financing during the whole life cycle,and whether there is a difference in the impact of trade credit on bank credit financing in different life cycle stages.In order to solve the above three problems,this paper first clarifies the background and significance of the research;then summarizes the internal and external factors that influence the trade credit in the current research,sorts out the literature on domestic and international enterprise life cycle and financing strategies,and summarizes the current business.The research on the relationship between credit and bank credit finds a new research perspective based on the current research status.On the basis of expounding information asymmetry theory,credit rationing theory,buyer market theory and signal transmission theory,the thesis combines the business characteristics and financial characteristics of the enterprise life cycle development stage to analyze the theory and put forward three hypotheses.Secondly,select the financial data of Shanghai-Shenzhen A-share listed companies from 2013 to 2017 as sample data,define variables,design models,and use empirical analysis methods to conduct a descriptive statistical analysis and correlation analysis on the overall situation of the sample data and the division of the enterprise life cycle,and regression analysis.Finally,make recommendations and summarize the shortcomings of the paper.The conclusions of this paper are as follows:(1)Bank credit financing constraint is a common phenomenon in China's listed companies in China.Specifically,enterprises in recession are faced with the most serious bank credit financing constraints,and long-term enterprises are in the middle,while mature enterprises are in the mature stage.Faced with a lower level of bank credit financing constraints.(2)With the development of enterprises,the use of trade credits also has a phased characteristic.The trade credits available for use in the growth period are the least,and the recession period is second.The trade credits available to mature enterprises are the most.(3)In the whole life cycle stage,trade credit has a substitution effect on bank credit,and after dividing the life cycle stage of the enterprise,the impact of trade credit on bank credit is different.In the long-term enterprises,trade credit has a promoting effect on bank credit;for mature enterprises and recession enterprises,trade credit is a substitute effect on bank credit.From the perspective of enterprise life cycle,this study examines the degree of bank credit financing constraints in each life cycle stage,the use of trade credit in China's listed companies,and how trade credit can play the role of financial communication.It not onlyprovides a new perspective for research related to trade credit and corporate finance,but also helps us to fully understand the characteristics and financing characteristics of each life cycle of the enterprise.Helping enterprises analyze their inherent characteristics in the development process,the degree of financing constraints and financing needs,help Chinese enterprises identify their own location in the development process,and formulate debt financing methods in line with the current development stage.And taking advantage of the staged characteristics of trade credit,this has important practical significance for enterprises to improve the efficiency of capital utilization and optimize the allocation of funds.