Research On The Impact Of Trade Credit On Stock Price Crash Risk Of Listed Companies In China

Trade credit refers to the creditor-debt relationship between enterprises formed by deferred payment or advance payment in commodity transactions.Customers can finance their business by delaying payment to suppliers.Trade credit is easy to obtain.It is widely used as an important short-term financing tool in the world.Especially in countries with underdeveloped financial markets,trade credit plays a more important role.China's stock market still has problems such as insufficient information disclosure,not timely,and insufficient investor protection,which may lead to higher stock price crash risks.Therefore,investors have higher demand for understanding the indicators that affect the risk of stock price collapse.Trade credit is the second most important source of external financing after bank lending.Suppliers providing trade credit have strong motivation and ability to constrain the opportunistic behavior of the buyer's company manager,which can effectively reduce the risk of stock price collapse.Based on the existing literature,this paper selects the listed companies in the A-share market from 2007 to 2017 as a sample,and uses the empirical model to quantitatively study the relationship between trade credit financing and stock price crash risk to find trade credit for individual stocks.Through research,it is found that the risk of future stock price collapse of companies using more trade credit financing is significantly reduced.Further analysis shows that bank borrowings that are debt financing similar to trade credit are positively correlated with the risk of stock price collapse,indicating that banks must monitor the company significantly.Less than the supplier that provides trade credit,the negative correlation between trade credit and stock price collapse risk is more obvious as for companies with a high degree of information asymmetry.Based on the new perspective of corporate financing policy,this paper provides new evidence for studying the decisive factors affecting the stock price crash risk,provides new theoretical support for investors and stakeholders to prevent stock market risks,and controls endogenous issues.After that,the conclusion is still true.