The Impact Of Executives’ Military Experiences On Corporate Trade Credit Financing

China is in the transition to the New Normal currently,and its growth of the economy is getting slow.Hence,plenty of firms are going through different levels of financing constraints.Due to multiple restrictions on credit rationing and equity financing,it is difficult for companies to obtain funds through formal financing.Trade credit financing,an informal financing method,has greatly eased the difficulty of corporate financing.Trade credit is relational financing based on trust between enterprises.It has been widely used in the business activities of enterprises and plays an important role in the daily production and operation of enterprises.Therefore,how to obtain more trade credit financing is even more important for enterprises.In recent years,with the development of behavioral economics,people have paid more and more attention to the influence of executive heterogeneity on firms.As the supreme decision-maker of production management and daily management of an enterprise,executives play a critical role in the production and management of a company.As individuals’early special experiences,do the executives’experiences in the military affect the company?Will this affect the trust of trade credit providers to firms,and will it in turn affect the trade credit financing obtained by the enterprise?Based on this,combined with the background of China’s large-scale disarmament in 2015,this paper builds a theoretical framework through high-level echelon theory,buyer’s market theory,information asymmetry theory and signal transmission theory,and selects 2012-2018 A-share listed companies as the research sample,and applies a combination of theoretical analysis and empirical research to study the connection between executives’ military experiences and corporate trade credit financing.The study finds that:(1)The experiences of executives in the military can enhance the trust of the transaction parties to the enterprise and increase the trade credit financing obtained by the enterprise.(2)Compared with state-owned enterprises,the positive impact of executives’ military experiences on enterprises’obtaining trade credit financing is more significant in private enterprises.(3)Compared with companies with a high market position,the positive impact of executives’ military experiences on corporate business credit financing is more significant among companies with a lower market position.(4)Compared with regions with a good trust environment,the experiences of executives in military affairs have a more significant impact on the business credit financing of enterprises in regions with a weak trust environment.After controlling for endogenous issues,the above conclusion is still true.Later,in further research,it finds that the internal control quality of the enterprise plays a part in the intermediary role between the executives’ military experiences and trade credit financing.That is,the executives with military experiences have a positive governance effect on the firm,and a positive effect on the transaction party’s trust,because those executives will enhance the internal control qualities.This reduces information asymmetry and increases the trade credit financing that companies get.This article is divided into six parts,the main contents are as below:The first part is the introduction.This part first explains the research background and significance of this article.Then cleared the research ideas,research framework,and research methods of this article,and finally introduced the innovations of this article.The second part is a literature review.The article mainly sorts out the relevant literature from the following two aspects:(1)the motivation and influencing factors of trade credit financing;(2)the impact of executives’ background characteristics on business management and trade credit financing.And on this basis,a literature review is carried out.The third part is the theoretical basis and research hypothesis.This part mainly introduces the theoretical basis of this paper,which is the high-level echelon theory,the buyer’s market theory,the information asymmetry theory,and the signal transmission theory.All these build the theoretical framework of this article.Based on theoretical analysis,this article proposes the hypothesis.The fourth part is empirical research design.This part explains the data sources and sample selection criteria of the research,explains the measurement methods of the explained variables,explanatory variables,control variables,moderator variables,and intermediary variables,and builds an empirical regression model.The fifth part is the empirical results and analysis.In this part,the article first conducts descriptive statistics and correlation analysis on the data,and then performs multiple regression analysis on the executives’ military experiences and corporate trade credit financing,and adds the nature of property rights,market status and regional trust environment quality as moderator variables.After verifying the reliability of the conclusion through the robustness test,the mechanism of action of the two is further studied.The sixth part is the research conclusion and prospect.This part is mainly based on the conclusions of the empirical regression results for further explanation,and based on this,relevant policy recommendations are made,and finally,the shortcomings of this article and the future research prospects are pointed out.The research in this article mainly has the following contributions:(1)This thesis enriches the academic achievements of executives’ military experiences on business management and related research on executives’ life experiences;(2)This thesis broadens the research perspective of the factors influencing trade credit financing and based on the theory of high-level echelon,the relationship between executives’ military experiences and corporate trade credit financing is studied;(3)This thesis provides a certain reference value for companies to obtain more trade credit financing and eases the difficulties of corporate financing constraints;(4)This thesis offers a certain reference on the selection and appointment of executives by related companies,it also provides evidence support for the placement of veterans and the unique advantages of military executives in China.