Research On The Influence Of Trade Credit On Industry Linkage

The earliest trade credit in China was originated in the Ming and Qing Dynasties and was an indispensable part of the economic development of the past.With the arrival and development of the commodity economy,trade credit has gradually been adopted by most enterprises as a financing channel.In particular,at this stage,Chinese SMEs face the problem of “funding difficulties and expensive financing”.In addition,Chinese financial system is still in the stage of development and improvement,so trade credit is the most widely used among SMEs.However,while trade credit eases the problem of corporate financing constraints,it also increases the inter-linkages between the industry’s capital chains,and becomes a channel for heterogeneous shocks to spread and expand in the industrial chain,resulting in the stability of the entire economic environment and profound influence.Therefore,this paper studies the impact of trade credit on industry linkages.From the theoretical and empirical aspects,it analyzes whether trade credit will increase the relationship between industries,and thus helps to explore heterogeneity shocks through trade credit channels and the path of transmission of the entire economic system.In theory,heterogeneous shocks are mainly transmitted to upstream and downstream industries through “guarantee value” and “trade credit line”,causing fluctuations in industry output and appearing as an industry linkage effect in the market.Among them,the “guarantee value” theory holds that the impact causes changes in production,which in turn causes changes in the value of collateral and the initial cash flow of upstream enterprises,thereby affecting the output of upstream enterprises.The “trade credit line” theory holds that when the upstream enterprises are affected,the trade credit line granted to the downstream enterprises will change,which will affect the output of the downstream enterprises.In the empirical aspect,using the input-output table published by China and the listed company data,through the construction of the fixed effect model of panel data,empirically testing the impact of trade credit on industry linkage.The results of empirical analysis show that the use of trade credit increases the linkage effect between industries.Trade credit has apositive impact on the correlation coefficient of the actual output growth rate of the industry.That is,as the use of trade credit increases,the path of heterogeneous shock propagation increases,the linkage between industries increases,and the industry is linked in the market effect.From the perspective of prudent management of macro risks,this paper believes that the Chinese government should actively build a good domestic credit system and maintain the sound operation of the inter-enterprise trade credit system and the normal operation of the economy.The government should increase information collection,broaden data collection channels,support mergers and acquisitions of upstream and downstream enterprises,reduce market friction among enterprises,establish a credit provision system,implement key enterprise rescue policies,consider trade credit factors when formulating monetary policies,and reduce enterprises’ financing impact;standardize legal provisions to promote the healthy development of enterprises.Enterprises should regularly organize relevant personnel training and education,make provision for enterprise risk reserves,and do a good job in financial disclosure and indicator review.