The Influence Study Of Entrepreneurs Heterogeneity To Trade Credit Financing Of Private Enterprise

Adverse selection and moral hazard caused by the information asymmetry destructs the equilibrium of credit market, thus, most enterprises represented by private enterprises are faced with funding constraints. Many scholars try to solve this problem, but most of the existing research focused on the bank credit, ignored the function of trade credit. In fact, trade credit also is an important part of corporation finance. In the literature which explain the factors influenced trade credit, most scholars focus on the macroeconomic situation(monetary policy, bank credit and financial crisis) and the condition of business(enterprise scale, operating life and growth factors, etc.). The role of entrepreneurs are rarely involved. The entrepreneurs in private enterprise are sets of ownership and management in a body, their personal wealth, reputation, political connection, bounded rationality will inevitably affect the enterprise trade credit financing.For a long time, the shortage of funds has been restricting the further development of private enterprises. In the credit limited circumstances, how is the trade credit financing in private enterprise? What kind of role the entrepreneurs play? In this paper, the integrated use of entrepreneur theory, upper echelons theory, credit rationing theory and information economics theory, through theory analysis, model analysis and empirical research, the paper analyze the trade credit financing problem of private enterprise from the heterogeneity of entrepreneur. Exploration in these aspects, can not only enrich the financing theory of small and medium-sized enterprises, but also have an important practical significance in helping the private enterprises to solve the financing problem by trade credit. The research of this paper mainly includes seven chapters.Chapter one firstly describes the background and significance of this paper, then defines the main concepts involved in the paper, next introduces the methodological and structure, finally illustrates the innovation of the paper.Chapter two is literature review section. In this chapter the literature of the formation mechanism and defusing of credit rating related SME financing, the factors affect the trade credit financing and the influence of entrepreneur heterogeneity to debt financing were reviewed, the gap of the existing literature and the study this paper will undertaken were pointed.Chapter three is theory analysis section. In this part, firstly we divided entrepreneurs heterogeneity into signal characteristic and bounded rationality characteristic from supply and demand affect the financing point of view, then analyze the influence of entrepreneurs heterogeneity to trade credit financing from the two characteristic. Lastly we construct two theory model to demonstrate the effect.The fourth chapter describe the sample enterprises from regional and industrial distribution, size and listed operation time as well as the profitability and growth firstly, then analyze entrepreneurs’ signal, bounded rationality characteristic, finally analyze the trade credit financing from the trends and composition. It can be noticed that entrepreneur heterogeneity varies in the initial wealth, reputation, political connections, overconfidence psychological, control retention preference and risk preference. The trade credit financing has reached the same level with the short-term bank loan and gradually become an important source of short-term funding in the SME Board Listed Companies, but its varies in different enterprises.Chapter five analyzes the influence of entrepreneur signal characteristic on trade credit financing in SME private listed corporation. With the data of SME board listed companies from 2007-2013 the chapter analyze the influence of entrepreneurs’ initial wealth, reputation and political connection on trade credit financing. The results show that entrepreneurs initial wealth, reputation and political connection is positively correlated with trade credit financing. At the end of this chapter, the empirical results are summarized and analyzed, and put forward the corresponding proposal.In chapter six, use the empirical method analyzes the bounded rationality characteristic’ influence of entrepreneur on trade credit financing. We respectively test the hypothesis of the entrepreneur’s overconfidence,control retention preference and risk preference on the trade credit financing. The results showed that in a certain scale of financing, the enterprise which entrepreneur overconfidence have more bank credit financing, while trade credit financing is less. From the entrepreneurs’ requirement of control right, in a certain scale of financing, the enterprise which the entrepreneurs’ control is consistent have more trade credit financing. And the same conditions, the enterprise which have higher the degree separation of two rights, trade credit financing is less. The enterprise which entrepreneur have prefer risk bank credit is more while trade credit financing is less. At the end of this chapter, the empirical results are summarized and analyzed, and put forward the corresponding proposal.Chapter seven summarizes the research conclusion, and respectively from the government, enterprises and entrepreneurs three aspects put forward some suggestions.With the above recommendations, this paper hope to promote private enterprise trade credit financing ability, thereby to solve the problem of financing difficult in private firms.The paper research the influence of entrepreneurs heterogeneity on trade credit financing of private listing corporation use the methods combined with normative research and empirical study, qualitative and quantitative comparison and induction. The study found that the entrepreneurs heterogeneity is an important factor to affect the private enterprise trade credit financing, relevant conclusions are as follows:(1) the initial wealth, reputation and political connection has signal transmission function, they can help the enterprise to obtain the trade credit financing.(2) overconfidence,control retention preference and risk preference may lead to entrepreneurs’ non rational behavior, thereby affecting the enterprise’s trade credit financing.Innovation of this paper are as follows:(1) the traditional financing theory of SME enterprise ignored the trade credit financing, the paper analyze the financing problem in private enterprise from the trade credit perspective.(2)the traditional research on the factors of trade credit neglect the impact of entrepreneurs, the paper analyze the influence of entrepreneurs on trade credit financing problem it enriches the relevant literature of trade credit financing.(3) in this paper, the heterogeneity of entrepreneur is divided into signal characteristic and bounded rationality characteristic from supply and demand affect the financing point of view, then through theoretical analysis and empirical research, the paper analyze the influence of entrepreneurs heterogeneity on trade credit financing problem of private enterprise, it has an important practical significance in helping the private enterprises to solve the financing problem by trade credit.