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| Study on the Mechanism of the Role of Commercial Credit Financing in Mitigating Enterprise Risk |
| WANG Jingbin，LI Yang，ZHANG Zijing，HOU Kexin |
| Tianjin University of Technology, Tianjin, China |
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Abstract To investigate whether commercial credit financing can alleviate corporate risk, this study, based on China’s A-share listed manufacturing enterprises, empirically tests the mechanism of trade credit financing on corporate risk from the dual perspectives of financing scale and cycle. This study shows that the scale of commercial credit financing has a non-linear effect on corporate risk by affecting corporate financing constraints and inventory holdings. Meanwhile, the trade credit financing cycle is found to have a negative correlation with corporate risk from the perspective of market transactions. In addition, the effects of trade credit financing scale and cycle on corporate risk are heterogeneous due to the difference in corporate ownership. Further, with the higher degree of supplier concentration, the scale of trade credit financing has a more salient effect on corporate risk.
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Received: 25 May 2021
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