Research On Internal Control,Enterprise Life Cycle And Trade Credit Relationship

Trade credit has become more and more widely used in the transaction process between enterprises and enterprises.As an informal and indirect financing channel,trade credit has made more and more contributions to economic development.The role played is also becoming more and more important.In the process of development,enterprises will experience different life cycle stages from the introduction period to the recession period.They have different operating characteristics in different life cycles,and there are certain differences in financing methods.The scale of trade credit used is also different.As a key indicator of the quality of business,internal control will also have a certain impact on the financing scale of trade credit in different life cycle stages.This paper links the three indicators of internal control,enterprise life cycle and trade credit for research.Firstly,the related researches of the three are reviewed,including the motivation of trade credit,the influencing factors of trade credit,the relationship between trade credit and internal control,and the relationship between business life cycle and trade credit.Then,based on information asymmetry theory and signal transmission Theory and capital structure theory put forward the research hypothesis of this paper;finally,empirical analysis and conclusions are made to propose policy recommendations.In the empirical part,this paper selects the data of China's listed companies from 2013 to 2017,first divides the samples into different stages according to the life cycle theory,and then compares the differences in the scale of trade credit financing between the growth period and the non-growth stage.In addition,the growth sample is classified into non-state-owned enterprises that are vulnerable to financing and sample of state-owned enterprises that are not vulnerable to financing according to the nature of property rights,and studies the difference in the scale of trade credit used between different samples.Then it studies the empirical research on the impact of internal control on trade credit.Finally,internal control is introduced into the model of research life cycle and trade credit relationship to explore the impact of internal control and business life cycle on trade credit.Through the combination of normative research and empirical research,the article selects A-share listed companies to empirically test the relationship between enterprise life cycle,internal control and corporate trade credit.The study found that:(1)There are differences in the scale of trade credit financing in different life cycles of enterprises.The sample is divided into long-term sample and non-growth sample.The study finds that enterprises in the growth stage have larger scale of trade credit financing than those in non-growth.(2)In the growth sample,the impact of property rights on trade credit is analyzed.The research finds that the non-state-controlled enterprises that are vulnerable to financing are more likely to have trade credit financing.(3)The quality of internal control is positively related to the scale of trade credit financing,that is,the higher the effectiveness of internal control,the greater the financing scale of trade credit.(4)Internal control has a positive effect on the scale of trade credit financing for long-term enterprises.That is,the higher the quality of internal control,the greater the scale of financing for companies in the growth stage.