Business association membership and firms’ access to trade credit: Evidence from thirty countries

Two-tier trade credit inventory system for defective and deteriorating items incorporating preservation technology and learning effect with carbon emission in an inflationary environment

Your debt matters to my business: Spillover effect of buyers' debt structure on suppliers’ credit risk

The role of customer stability in corporate trade credit provision

A multi-period equilibrium-based optimization framework for water pollution credit trading under load-based regulation

ABSTRACT How firms can better cope with the adverse impacts of extreme rainfall has become an important issue. As an institutional arrangement designed to enhance urban water environment governance and strengthen flood control capacity, the Sponge City Pilot program raises the question of whether it significantly affects firms’ access to trade credit. This paper treats the Sponge City Pilot program as a quasi-natural experiment and adopts a staggered difference-in-differences approach, using data from Chinese “rain-sensitive” listed firms from 2007 to 2020 to investigate the effect of climate adaptation policies on firms’ trade credit. Our results show that the pilot program significantly enhances trade credit availability for rain-sensitive firms. Specifically, the pilot program increases firms’ trade credit by 1.144% points, which corresponds to an increase of approximately 10.93% relative to the pre-policy mean of the treated firms. This effect tends to be stronger for firms with greater bargaining power and heavier reliance on external finance. Mechanism tests further reveal that the program promotes firms’ availability of trade credit by mitigating firms’ climate risks and improving market accessibility. These insights provide a roadmap for optimizing the Sponge City Pilot program, which in turn fosters corporate sustainability and propels China’s high-quality economic development.

ABSTRACT This paper examines whether and how digital transformation improves ESG performance using a sample of Chinese A-share listed firms from 2013 to 2022. We find that digital transformation significantly increases ESG performance. Mechanism tests show that this effect operates mainly through stronger supply chain competition, reflected in lower supply chain concentration and greater trade credit. Further decomposition reveals asymmetric channels: lower supplier concentration, lower customer concentration, and greater upstream trade credit financing significantly mediate the relationship, whereas downstream trade credit provision does not. The effect is stronger under high economic policy uncertainty and among non-state-owned and high-tech firms. By linking digital transformation to ESG through changes in supply chain power and financing relations, this study extends the literature on digitalization and sustainability in an important emerging-market context.

The aims of this paper to focused on the coupling of financial technology (Green Fintech) and sustainable practices is shaped the future of infrastructure development and environmental responsibility. This paper examines the interrelated nature of Green Fintech, Infrastructure, the Carbon Market, and Sustainable infrastructure for the benefit of low-carbon economies. Green Fintech, through mechanisms such as green bond rates, Fintech penetration, and ESG investment indices, drives activity in the Carbon Market by facilitating carbon credit trading, pricing, and emissions certification. methodological this paper adopts qualitative approach and revised previous papers which related, to address the research gap and suggest new integrated model.

ABSTRACT Climate change presents increasing operational risks for firms, yet its influence on financial policy remains underexplored. While prior research has examined climate change's effects on capital structure and investment decisions, the role of trade credit, a vital tool for liquidity management, has received limited attention. Drawing on data from US firms between 2001 and 2021, this study investigates how climate change exposure affects suppliers' provision of trade credit. The empirical findings reveal a statistically significant positive relationship between climate exposure and trade credit provision, particularly among firms with greater financial flexibility, weaker performance, or lower reputational standing. Moreover, shareholders respond favorably to such credit expansions. These results suggest that trade credit functions as a risk‐sharing mechanism for climate‐exposed firms, offering novel insights into adaptive financial strategies and stakeholder responses to environmental challenges.

In the digital economy, the importance of robust cybersecurity governance for corporate financing stability has become increasingly salient. Using a sample of Chinese A-share listed companies from 2011 to 2023, we employ the Word2vec natural language processing technique to develop a measure of corporate cybersecurity governance commitment. Our study empirically examines its impact on trade credit financing. The results indicate that a firm’s expressed commitment to cybersecurity governance is positively associated with the trade credit it receives from suppliers. We find that information asymmetry and corporate reputation are key mechanisms through which this effect operates. Heterogeneity analysis reveals that this effect is more pronounced for firms that have received regulatory inquiry letters, those without political ties, those operating during periods of high economic policy uncertainty, and those located in regions with low social trust. Furthermore, we show that when firms’ stated commitments align with their actions, suppliers adjust their business relationships by allocating a greater share of procurement volume to them, thereby strengthening long-term supply chain trust. Our findings offer valuable insights for firms in emerging economies seeking to enhance their cybersecurity governance and optimize their financing environment.

Editorial Note: Predicting corporate credit risk: Network contagion via trade credit.

This study develops an environmentally sustainable inventory system for retailers engaged in the sale of recycled products derived from the reprocessing industry. The model integrates an investment framework in additive manufacturing technology aimed at minimizing emissions and waste during production while simultaneously enhancing product quality. The primary objective of the proposed inventory system is to elevate the quality standards of recycled products and improve overall profitability. Furthermore, the model incorporates demand-dependent reliability, pricing, and quality factors to maximize profit while satisfying customer demand. It also considers deteriorating items, potential shortages, and trade credit policies to ensure a realistic operational structure. The applicability and efficiency of the proposed approach have been demonstrated through a case study involving an existing retailer, confirming its capability to enhance profitability while promoting eco-friendly production via additive manufacturing (AM). The results indicated that the integration of AM technology led to more than 2% improvement in total profit for the inventory system. In addition, a sensitivity analysis was performed to assess the influence of key parameters on the optimal solution.

ABSTRACT This paper investigates whether and how trade secrets, as an important intellectual property asset of firms, impact trade credit provision. Examining 8044 US firms during the period from 1995 to 2023, we find that firms relying more on trade secrets extend less trade credit to customers. Our findings remain robust across a battery of sensitivity tests and endogeneity tests. Further mediation analysis reveals that this negative association stems from heightened information asymmetry and enhanced market power derived from proprietary knowledge. Finally, we document that trade credit provision partially mediates the relationship between trade secrecy and firm value.

Purpose The purpose of this paper is to integrate the trade credit transaction as a generative mechanism into Ring and Van de Ven’s (1994) framework of buyer–supplier relationship development. The purpose is reached by the means of two questions: How can the trade credit transaction be integrated into Ring and Van de Ven’s (1994) framework? Secondly, how can the trade credit transaction be useful to understand relationship development and change? Design/methodology/approach The paper is conceptual in nature. Findings Ring and Van de Ven (1994) argue that buyer–supplier relationships emerge as outcomes of a transaction process comprising three stages: negotiation, commitment and execution. Based on recent developments in process theory, this study develops a framework with the trade credit transaction as a generative mechanism. This generative mechanism explains how actors move forward at each stage and why they move to the next stage in the transaction. The trade credit transaction involve suppliers delivering products first, with payments made 30–60 days later. Originality/value This paper offers three significant contributions. Firstly, relationship development and change are explained by a generative mechanism rather than by single transactions. Secondly, the paper contributes by problematising the starting conditions for buyer-seller relationships and the role of the social matrix. Finally, this paper raises questions about the unit of analysis in studies of buyer–supplier relationship development.

Does artificial intelligence contribute to soliciting trade credit?

This paper examines the impact of trade credit and bank loans on firms’ exchange rate passthrough. Using a comprehensive dataset combining customs transaction records and balance sheet data for Chinese exporters during 2000–2011, we document that firms that more intensively extend trade credit to their buyers exhibit more complete exchange rate pass-through. Further empirical investigation sheds light on the underlying mechanism. First, the use of trade credit is positively correlated with exporters’ dependence on bank loans. Second, firm-level bank loan interest rates decline following home currency depreciation. Motivated by these findings, we develop a theoretical model in which exporters constrained by working capital simultaneously extend trade credit to buyers and rely on bank borrowing. The model shows that home currency depreciation improves exporters’ profitability, lowers default risk, and reduces borrowing costs, ultimately enhancing exchange rate pass-through. By endogenizing the interest rate through firm-level default risk, the model reveals a novel channel through which firms’ financial activities shape the dynamics of exchange rate pass-through.

The effect of creditor judicial protection on trade credit in supply chains: Evidence from the establishment of bankruptcy courts in China

Information security management and trade credit: evidence from Chinese listed firms

In today's competitive business environment, organizations must collaborate to promote eco-friendly products while ensuring long-term financial sustainability. The rising demand for environmentally conscious goods has driven innovation, particularly in incorporating herbal and natural ingredients. This study introduces a green inventory model for products with non-instantaneous deterioration, designed to help organizations maximize their total annual profit under various trade credit policies. The model provides a mathematical framework to maintain sustainability through investments in environmental awareness and preservation technologies for deteriorating products, alongside trade credit strategies that support sustainable marketing efforts. The primary goal is to achieve sustainability by optimizing pricing, investing in environmental initiatives and preservation technology, and determining the optimal cycle length to maximize total profit. The model assumes that the demand rate is influenced by factors such as selling price, stock levels, and environmental awareness. From the retailer's perspective, the analysis seeks to identify sustainable ordering strategies that maximize annual profit.

Bankruptcy court reform and spillover effects on trade credit provision: evidence from China