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COVID-19 Pandemic and Corporate Liquidity: The Role of SOEs’ Trade Credit Response
Although state-owned enterprises are associated with less efficiency and lead to resource misallocation, they may have stabilizing effect in face of a crisis. Exploiting the COVID-19 pandemic as a natural experiment, we study the role of firm ownership in trade credit provision and find robust evide...
Autores principales: | , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Elsevier Ltd.
2023
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10299843/ http://dx.doi.org/10.1016/j.jimonfin.2023.102901 |
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author | Wang, Xun Yu, Jingwen |
author_facet | Wang, Xun Yu, Jingwen |
author_sort | Wang, Xun |
collection | PubMed |
description | Although state-owned enterprises are associated with less efficiency and lead to resource misallocation, they may have stabilizing effect in face of a crisis. Exploiting the COVID-19 pandemic as a natural experiment, we study the role of firm ownership in trade credit provision and find robust evidence that SOEs increase their trade credit to downstream firms more than non-SOEs after the outbreak of the pandemic. Moreover, we explore the underlying mechanism and find that better financing ability and multitask of the SOEs contribute to greater trade credit during the pandemic, and the latter plays a more active role. Further analyses show that SOEs’ advantage in trade credit extension is more pronounced in industries with higher external financial dependence and provinces with a higher level of government involvement, suggesting that SOEs might have greater comparative advantage in screening due to its involvements in local economy during crisis periods. Our paper provides new insights into the real effects of SOEs on the economy. |
format | Online Article Text |
id | pubmed-10299843 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2023 |
publisher | Elsevier Ltd. |
record_format | MEDLINE/PubMed |
spelling | pubmed-102998432023-06-28 COVID-19 Pandemic and Corporate Liquidity: The Role of SOEs’ Trade Credit Response Wang, Xun Yu, Jingwen J Int Money Finance Article Although state-owned enterprises are associated with less efficiency and lead to resource misallocation, they may have stabilizing effect in face of a crisis. Exploiting the COVID-19 pandemic as a natural experiment, we study the role of firm ownership in trade credit provision and find robust evidence that SOEs increase their trade credit to downstream firms more than non-SOEs after the outbreak of the pandemic. Moreover, we explore the underlying mechanism and find that better financing ability and multitask of the SOEs contribute to greater trade credit during the pandemic, and the latter plays a more active role. Further analyses show that SOEs’ advantage in trade credit extension is more pronounced in industries with higher external financial dependence and provinces with a higher level of government involvement, suggesting that SOEs might have greater comparative advantage in screening due to its involvements in local economy during crisis periods. Our paper provides new insights into the real effects of SOEs on the economy. Elsevier Ltd. 2023-06-27 /pmc/articles/PMC10299843/ http://dx.doi.org/10.1016/j.jimonfin.2023.102901 Text en © 2023 Elsevier Ltd. All rights reserved. Since January 2020 Elsevier has created a COVID-19 resource centre with free information in English and Mandarin on the novel coronavirus COVID-19. The COVID-19 resource centre is hosted on Elsevier Connect, the company's public news and information website. Elsevier hereby grants permission to make all its COVID-19-related research that is available on the COVID-19 resource centre - including this research content - immediately available in PubMed Central and other publicly funded repositories, such as the WHO COVID database with rights for unrestricted research re-use and analyses in any form or by any means with acknowledgement of the original source. These permissions are granted for free by Elsevier for as long as the COVID-19 resource centre remains active. |
spellingShingle | Article Wang, Xun Yu, Jingwen COVID-19 Pandemic and Corporate Liquidity: The Role of SOEs’ Trade Credit Response |
title | COVID-19 Pandemic and Corporate Liquidity: The Role of SOEs’ Trade Credit Response |
title_full | COVID-19 Pandemic and Corporate Liquidity: The Role of SOEs’ Trade Credit Response |
title_fullStr | COVID-19 Pandemic and Corporate Liquidity: The Role of SOEs’ Trade Credit Response |
title_full_unstemmed | COVID-19 Pandemic and Corporate Liquidity: The Role of SOEs’ Trade Credit Response |
title_short | COVID-19 Pandemic and Corporate Liquidity: The Role of SOEs’ Trade Credit Response |
title_sort | covid-19 pandemic and corporate liquidity: the role of soes’ trade credit response |
topic | Article |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10299843/ http://dx.doi.org/10.1016/j.jimonfin.2023.102901 |
work_keys_str_mv | AT wangxun covid19pandemicandcorporateliquiditytheroleofsoestradecreditresponse AT yujingwen covid19pandemicandcorporateliquiditytheroleofsoestradecreditresponse |