Military Experience of Senior Executives and Business Credit Supply of Enterprises

Abstract

This study is based on the data of Chinese A-share listed companies from 2005 to 2022 and empirically examines the relationship between senior executives' military experience and the supply of commercial credit by enterprises. The research findings suggest that senior executives with military experience can significantly enhance the level of commercial credit supply by the company. The mechanism analysis indicates that top executives' military experience promotes the provision of greater business credit through two pathways: mitigating the level of information asymmetry within the company and strengthening the effectiveness of internal controls. Heterogeneity tests reveal that the positive impact of top executives' military experience on the acquisition of commercial credit supply is particularly pronounced in eastern region companies as well as state-owned holding companies. This study addresses the existing research gap by shedding light on the specific effects and pathways of top executives' military experience in promoting the provision of business credit, thus enhancing our understanding of their personal traits and life experiences. Furthermore, it provides valuable insights for improving the evaluation system of commercial credit within enterprises.