Listed Company's Trade Credit Financing : Based on Chinese A-Share Listed Companies
- Resource Type
- Dissertation/ Thesis
- Authors
- 정우정 / Zheng Yuting
- Source
- Subject
- A-share listed company; Trade credit financing; Sales growth: Stock return.
- Language
- English
At present, China has the largest number of listed companies in the world. With the information on future prospects of these listed companies, trade credit suppliers extend trade credit to gain profit from profitable businesses. This paper shows that this information advantage generates significant predictability in assessment of investment return. In the light of A-share listed company’s characteristics, companies that rely more on trade credit relative to debt financing have higher potential for future sales growth and stock returns. The return predictability of trade credit is more significant for firms with a higher degree of information asymmetry. Therefore this paper is to investigate the factors that influence the use of trade credit and the relationship between the use of trade credit and the future prospects of the listed companies utilizing trade credit.