Executives' Academic Experience And Corporate Trade Credit Financing

According to a survey organized by the China Academy of Fiscal Science in August 2017,56 percent of companies still have problems with financing difficulties and expensive financing.Although the government has implemented relevant policies to help companies solve financing problems,this issue has not been effectively alleviated.At present,China's financial market is still in an immature stage,and the phenomenon of “credit rationing” of banks is widespread.Traditional financial financing has various constraints,and it is increasingly difficult for companies to obtain direct financing from banks.In this case,companies that have difficulty obtaining loans from banks will turn to suppliers,and trade credit financing as an alternative financing method for bank credit is critical to the business.As the highest decision-maker of the company's daily business management activities,the CEO is the spokesperson of the corporate image,and its reputation has become an important part of the company's reputation.The prestige of the academic background of the executives in the society can enhance the social capital of the enterprise with social trust and network relationship as the core,and provide the foundation and guarantee mechanism for the social credit for the enterprise to obtain commercial credit financing.Therefore,this paper studies the academic experience of executives based on the perspective of trust to help enterprises to carry out trade credit financing.Based on the 2008-2016 data of China's A-share listed companies,this paper empirically tests the impact of executives' academic experience on corporate trade credit financing from the perspective of trust,and further examine the difference in the impact of different social trusts on the basis of differences in the nature of corporate property rights,differences in market positions,and regional legal systems.The main conclusion of this paper is that the academic experience of executives can help enterprises to carry out trade credit financing.This aspect is because the social capital of the academic background of the executives provides the foundation and guarantee mechanism for social credit for enterprises to obtain trade credit financing.on the other hand,it is because the executives with academic experience have their own prudence and honesty and trustworthiness.Self-requirement leads to higher levels of internal control and lower information risk,which reduces the risk of default.Further research in this paper also found that the academic experience of executives has a greater role in promoting trade credit financing for non-state-owned enterprises,enterprises with lower market positions,and enterprises with relatively lagging rule of law.The contribution of this paper is to enrich the study of the economic consequences of executives' academic experience and to help understand the impact of social trust on the relationship between executive academic experience and corporate trade credit financing in China's modern market economy.For suppliers,“soft” information such as the personality characteristics and personal experience of company executives is an important basis for judging the default risk of credit application companies.For enterprises,China's private enterprises,enterprises with lower market status,and enterprises with relatively lagging rule of law can maintain and enhance the cooperative trust relationship with suppliers by hiring senior executives with academic experience.The problem of operational financing difficulties.