Trade Credit Redistribution And Corporate Performance

The development of China's capital market is lagging.Information asymmetry between financial institutions and enterprises often causes many companies to be subject to credit rationing.In addition to the ownership preferences of financial institutions,private enterprises are still plagued by the difficulty of financing.The trade credit redistribution function can build a bridge between financial institutions and companies that have been allocated credit,and provide funds for companies that have been allocated credit.Stateowned enterprises can also leak financial resources to private enterprises through trade credit,that is,redistribution of trade credit is conducive to alleviating the ownership discrimination in the first distribution of financial resources.The main body of secondary distribution of credit using trade credit is the enterprise,so what is the motivation of the enterprise to be willing to perform secondary distribution?Based on the theory of trade credit redistribution,this paper proposes trade credit redistribution indicators,and identifies the companies that perform trade credit redistribution,and observes whether these companies perform better,with a view to finding the secondary distribution of credit's driving force from the perspective of corporate performance.Furthermore,this article divides corporate performance and explores the channels through which trade credit redistribution affects corporate performance.Using the panel composed of all A-share listing data from 2009 to 2018,it has been empirically found that the performance of companies that use trade credit to redistribute credit is better,and their net profit margin and asset turnover rate are also higher.Through group comparison,it is also found that private enterprises are more willing to use trade credit for secondary credit distribution.Based on the results of the study,the article has some enlightenments:(1)As companies have an incentive to use trade credit for credit redistribution,and the function of trade credit redistribution will affect the effectiveness of monetary policy implementation,the government should take this impact into consideration;(2)Trade credit can alleviate the financing constraints of enterprises subject to credit rationing,but because state-owned enterprises have weak incentives for redistribution,excessive preference of state-owned enterprises in the capital market will actually make financial resources inefficient.On this basis,the government should continue to deepen the reform of financial markets and state-owned enterprises,and try to minimize the ownership discrimination in the first allocation of financial resources;(3)The development of China's supply chain finance is still in its infancy,and trade credit redistribution functions can make the core enterprises of the supply chain provide liquidity to non-core enterprises,thereby promoting the overall development of the supply chain.