Supply Chain Finance and the Sustainable Growth of Chinese Firms: The Moderating Effect of Digital Finance
Sustainable development is crucial to the survival and healthy development of enterprises, which is closely related to their financing situation. Supply chain finance is an effective way to improve and enhance the financing situation by easing financing constraints and reducing financing costs. As a...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Frontiers Media S.A.
2022-06-01
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| Series: | Frontiers in Environmental Science |
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| Online Access: | https://www.frontiersin.org/articles/10.3389/fenvs.2022.922182/full |
| _version_ | 1811240057801015296 |
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| author | Tinghua Liu Weiya Liu Ehsan Elahi Xiao Liu |
| author_facet | Tinghua Liu Weiya Liu Ehsan Elahi Xiao Liu |
| author_sort | Tinghua Liu |
| collection | DOAJ |
| description | Sustainable development is crucial to the survival and healthy development of enterprises, which is closely related to their financing situation. Supply chain finance is an effective way to improve and enhance the financing situation by easing financing constraints and reducing financing costs. As an important source of supply chain short-term financing, trade credit plays an important role in enterprise production and circulation. Taking Chinese listed companies from 2011 to 2020 as samples, this paper studied the impact of trade credit on sustainable growth and its internal mechanism. Furthermore, we analyzed the moderating effect of digital finance development on the influence of trade credit on sustainable growth. It is found that receiving trade credit benefited firms’ sustainable growth. Furthermore, study found that receiving trade credit has a greater positive impact on the sustainable growth of enterprises in regions with higher levels of financial development, high-tech industries, state-owned enterprises and small enterprises. Whereas, the provision of trade credit had an obvious inhibiting effect on the sustainable growth of enterprises in the regions with low level of financial development, non-high-tech industries, private enterprises and small enterprises. The results of the influencing mechanism showed that receiving trade credit promoted firm’s sustainable growth by “agency cost reducing effect,” while providing trade credit inhibited firm’s sustainable growth by “forcing effect.” In addition, the development of digital finance weakens the positive impact of trade credit financing on enterprises’ sustainable growth but strengthens the negative impact of providing trade credit on sustainable growth. From the perspective of sustainable growth, this paper explained the role of trade credit financing in alleviating the financing dilemma of enterprises, which is urgently needed by most emerging economies pursuing high-quality development. Therefore, in order to give full play to the role of trade credit financing, the government should actively create a good credit environment. At the same time, the government should vigorously develop digital finance to enhance its ability to serve the real economy. |
| first_indexed | 2024-04-12T13:12:36Z |
| format | Article |
| id | doaj.art-1cc9e7fc0c8b42649a4671674eb04ce5 |
| institution | Directory Open Access Journal |
| issn | 2296-665X |
| language | English |
| last_indexed | 2024-04-12T13:12:36Z |
| publishDate | 2022-06-01 |
| publisher | Frontiers Media S.A. |
| record_format | Article |
| series | Frontiers in Environmental Science |
| spelling | doaj.art-1cc9e7fc0c8b42649a4671674eb04ce52022-12-22T03:31:48ZengFrontiers Media S.A.Frontiers in Environmental Science2296-665X2022-06-011010.3389/fenvs.2022.922182922182Supply Chain Finance and the Sustainable Growth of Chinese Firms: The Moderating Effect of Digital FinanceTinghua Liu0Weiya Liu1Ehsan Elahi2Xiao Liu3School of Economics, Shandong University of Technology, Zibo, ChinaSchool of Economics, Shandong University of Technology, Zibo, ChinaSchool of Economics, Shandong University of Technology, Zibo, ChinaSchool of Urban and Regional Science, Shanghai University of Finance and Economics, Shanghai, ChinaSustainable development is crucial to the survival and healthy development of enterprises, which is closely related to their financing situation. Supply chain finance is an effective way to improve and enhance the financing situation by easing financing constraints and reducing financing costs. As an important source of supply chain short-term financing, trade credit plays an important role in enterprise production and circulation. Taking Chinese listed companies from 2011 to 2020 as samples, this paper studied the impact of trade credit on sustainable growth and its internal mechanism. Furthermore, we analyzed the moderating effect of digital finance development on the influence of trade credit on sustainable growth. It is found that receiving trade credit benefited firms’ sustainable growth. Furthermore, study found that receiving trade credit has a greater positive impact on the sustainable growth of enterprises in regions with higher levels of financial development, high-tech industries, state-owned enterprises and small enterprises. Whereas, the provision of trade credit had an obvious inhibiting effect on the sustainable growth of enterprises in the regions with low level of financial development, non-high-tech industries, private enterprises and small enterprises. The results of the influencing mechanism showed that receiving trade credit promoted firm’s sustainable growth by “agency cost reducing effect,” while providing trade credit inhibited firm’s sustainable growth by “forcing effect.” In addition, the development of digital finance weakens the positive impact of trade credit financing on enterprises’ sustainable growth but strengthens the negative impact of providing trade credit on sustainable growth. From the perspective of sustainable growth, this paper explained the role of trade credit financing in alleviating the financing dilemma of enterprises, which is urgently needed by most emerging economies pursuing high-quality development. Therefore, in order to give full play to the role of trade credit financing, the government should actively create a good credit environment. At the same time, the government should vigorously develop digital finance to enhance its ability to serve the real economy.https://www.frontiersin.org/articles/10.3389/fenvs.2022.922182/fullsupply chain financetrade creditsustainable growthmandatory effectdigital finance |
| spellingShingle | Tinghua Liu Weiya Liu Ehsan Elahi Xiao Liu Supply Chain Finance and the Sustainable Growth of Chinese Firms: The Moderating Effect of Digital Finance Frontiers in Environmental Science supply chain finance trade credit sustainable growth mandatory effect digital finance |
| title | Supply Chain Finance and the Sustainable Growth of Chinese Firms: The Moderating Effect of Digital Finance |
| title_full | Supply Chain Finance and the Sustainable Growth of Chinese Firms: The Moderating Effect of Digital Finance |
| title_fullStr | Supply Chain Finance and the Sustainable Growth of Chinese Firms: The Moderating Effect of Digital Finance |
| title_full_unstemmed | Supply Chain Finance and the Sustainable Growth of Chinese Firms: The Moderating Effect of Digital Finance |
| title_short | Supply Chain Finance and the Sustainable Growth of Chinese Firms: The Moderating Effect of Digital Finance |
| title_sort | supply chain finance and the sustainable growth of chinese firms the moderating effect of digital finance |
| topic | supply chain finance trade credit sustainable growth mandatory effect digital finance |
| url | https://www.frontiersin.org/articles/10.3389/fenvs.2022.922182/full |
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