Stock liquidity and corporate trade credit strategies: evidence from China

This study investigates the nexus of stock liquidity and trade-credit policies in China from 2002 to 2017. The estimates are robust to alternative proxies, various fixed-effects, and the exogenous impact of Chinese split share structure reforms (SSSR) 2005-06 is investigated through the difference-...

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Autores principales:	Umeair Shahzad, Jing Liu, Fukai Luo
Formato:	article
Lenguaje:	EN
Publicado:	Vilnius Gediminas Technical University 2021
Materias:	trade credit stock liquidity stock market financial flexibility equity financing trading activity Business HF5001-6182
Acceso en línea:	https://doaj.org/article/b3458a4ae9724cb2b8e48682c22f82cb
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spelling	oai:doaj.org-article:b3458a4ae9724cb2b8e48682c22f82cb2021-11-30T16:03:57ZStock liquidity and corporate trade credit strategies: evidence from China10.3846/jbem.2021.156551611-16992029-4433https://doaj.org/article/b3458a4ae9724cb2b8e48682c22f82cb2021-11-01T00:00:00Zhttps://www.mma.vgtu.lt/index.php/JBEM/article/view/15655https://doaj.org/toc/1611-1699https://doaj.org/toc/2029-4433 This study investigates the nexus of stock liquidity and trade-credit policies in China from 2002 to 2017. The estimates are robust to alternative proxies, various fixed-effects, and the exogenous impact of Chinese split share structure reforms (SSSR) 2005-06 is investigated through the difference-in-difference analysis. The results validate that stock liquidity significantly impacts firms’ capacity to produce more trade credit supplies and less reliant on trade credit demand. The study applied SUEST analysis to investigate the effect of the Chinese institutional setting. The nexus of stock liquidity and trade credit strategies is substantial in state-owned enterprises. Additional analysis revealed that the said association is more visible to credit-constrained and equity-reliant enterprises. The policymakers should focus on market liquidity because it elevates firms’ capacity to mobilize capital through trade credit provisions. The micro aspect of this study suggests that stock liquidity allows managers to shape non-price competitive strategies and avoid excessive usage of trade credits. First published online 30 November 2021 Umeair ShahzadJing LiuFukai LuoVilnius Gediminas Technical Universityarticletrade creditstock liquiditystock marketfinancial flexibilityequity financingtrading activityBusinessHF5001-6182ENJournal of Business Economics and Management (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	trade credit stock liquidity stock market financial flexibility equity financing trading activity Business HF5001-6182
spellingShingle	trade credit stock liquidity stock market financial flexibility equity financing trading activity Business HF5001-6182 Umeair Shahzad Jing Liu Fukai Luo Stock liquidity and corporate trade credit strategies: evidence from China
description	This study investigates the nexus of stock liquidity and trade-credit policies in China from 2002 to 2017. The estimates are robust to alternative proxies, various fixed-effects, and the exogenous impact of Chinese split share structure reforms (SSSR) 2005-06 is investigated through the difference-in-difference analysis. The results validate that stock liquidity significantly impacts firms’ capacity to produce more trade credit supplies and less reliant on trade credit demand. The study applied SUEST analysis to investigate the effect of the Chinese institutional setting. The nexus of stock liquidity and trade credit strategies is substantial in state-owned enterprises. Additional analysis revealed that the said association is more visible to credit-constrained and equity-reliant enterprises. The policymakers should focus on market liquidity because it elevates firms’ capacity to mobilize capital through trade credit provisions. The micro aspect of this study suggests that stock liquidity allows managers to shape non-price competitive strategies and avoid excessive usage of trade credits. First published online 30 November 2021
format	article
author	Umeair Shahzad Jing Liu Fukai Luo
author_facet	Umeair Shahzad Jing Liu Fukai Luo
author_sort	Umeair Shahzad
title	Stock liquidity and corporate trade credit strategies: evidence from China
title_short	Stock liquidity and corporate trade credit strategies: evidence from China
title_full	Stock liquidity and corporate trade credit strategies: evidence from China
title_fullStr	Stock liquidity and corporate trade credit strategies: evidence from China
title_full_unstemmed	Stock liquidity and corporate trade credit strategies: evidence from China
title_sort	stock liquidity and corporate trade credit strategies: evidence from china
publisher	Vilnius Gediminas Technical University
publishDate	2021
url	https://doaj.org/article/b3458a4ae9724cb2b8e48682c22f82cb
work_keys_str_mv	AT umeairshahzad stockliquidityandcorporatetradecreditstrategiesevidencefromchina AT jingliu stockliquidityandcorporatetradecreditstrategiesevidencefromchina AT fukailuo stockliquidityandcorporatetradecreditstrategiesevidencefromchina
_version_	1718406467382411264

Stock liquidity and corporate trade credit strategies: evidence from China

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