Influencing Factors Of China’s A-share Listed Companies In The Trade Credit

Commercial credit as an integral part of modern financial and economic life has become an important way of business and finance for every enterprise. In China,2000-2006, the Shanghai A-share listed company receivables to total assets ratio of7.61%, comparing U.S. had21%of the proportion It had large difference. So, commercial credit in China has a lot of room for growth. Foreign theory for several hundred years of history for commercial credit, but china started the commercial credit research since the reform and opening up, only30years. So, we do not form a systematic theory, factor affecting the commercial credit authority.Abroad for the supply and use of commercial credit to the formation of two theories:the operating theory of motivation and the financing motive theory. The former describes the motives of commercial credit, the other describes the motives for the use of commercial credit.In this paper, I use1376samples from the2010A-share. After controlling the industry influences, I studied the factors that affect provision and use of commercial credit.Providing commercial credit I use the index,2010end of the year, notes receivable and accounts receivable on the balance sheet divided by total operating income. Business needs of commercial credit, corresponding to the use by the end of2010, on the balance sheet to meet the bills and notes receivable divided by total operating income. Independent variable, the internal factors included:the scale of corporate assets, operating profit growth, the corporate existence of time, inventory levels, current ratio, operating margin, interest-bearing debt ratio. The external factors included:economic fundamentals, financial development, institutional and ethical culture.The article added industry factors as a control variable, excluding the impact of industry factors. Promulgated by the CSRC industry classification, excluding financial and insurance of listed companies, the total is divided into11categories: agriculture, forestry, fishery, animal husbandry, mining and quarrying, manufacturing, electricity, gas and water production and supply industry, construction, transportation, warehousing, IT industry, wholesale and retail trade, real estate, social services, communication and cultural industries, comprehensive.An article classified in accordance with the industry has discussed the commercial credit to use and provide.From the commercial credit, information technology, manufacturing and construction had the highest the receivable level. The IT industry relies on foreign trade, using less cash transactions, so had a higher proportion. Manufacturing the most obvious feature is the scale effect, by expanding the scale to get more profit. In addition, due to fierce competition them can only be through the provision of commercial credit to profit. The construction industry in its industry’s peculiarities. The one hand, the construction project payments typically are based on the installments and capital return is slow. More important, in the construction market, the building in general are the builders use their own money to build before the construction is over.The wholesale and retail trade, agriculture, forestry, fishery and animal husbandry has the smallest level, because these two sectors was mainly for domestic,and these products were perishable and time-bound, therefore, using the method of settlement is basically a cash transaction, take the case of commercial credit is very small. Real estate and construction using commercial credit levels were significantly higher than other industries, with2010of macroeconomic conditions have a certain impact. Similar to the construction industry, construction with the high level of receivables reason and a high level of accounts receivable is due to the particularity of its industry. Agriculture, forestry, fishery, animal husbandry had the lowest level of because they taken the cash settlement.The article uses econometric methods to analyze the factors that affect commercial credit.From internal factors, the enterprise assets scale and enterprises years are significantly positive with the commercial credit supple. Inventory level and operating profit margin are significantly positive with the commercial credit supple. The companies, which had longer time on market, larger asset size,had quality assurance, produced sales market of a certain size, supple less commercial credit. The company with the higher the margin, more easily through price discrimination to get more profit, and the company with higher inventory levels, through the provision of commercial credit to the implementation of the promotion, expansion of sales. From external factors, the commercial credit as a significant negative correlation between the system and the integrity of culture and enterprise. Commercial credit is not the basis of regional economic and financial development level.About the use of commercial credit, I found the following conclusions:Look at internal factors, asset size, operating profit growth, inventory levels are significantly positive with enterprises use commercial credit. Current ratio, debt ratio of interest-bearing deposits and corporate commercial credit as a significant negative correlation. Enterprises in the financing of comparative advantage to obtain commercial credit from the supplier, the more demand for commercial credit due to the existence of credit rationing. Asset size, sales growth and IPO of years reflects the advantage of access to commercial credit, interest-bearing deposit rate reflects an alternative to credit rationing commercial credit and bank credit. Inventory levels and the current ratio is the use of commercial credit to the necessity and protection in the process of production and operation. From the external factors that affect the economic base and businesses use commercial credit as a significant negative correlation. Financial development and corporate business credit as a significant negative correlation. System and the culture of integrity and corporate use of commercial credit as a significant negative correlation. The higher the regional economic base and regional financial development level and system level of credit culture enterprise but less commercial credit, to a certain extent reflects the commercial credit and bank credit alternative credit rationing.The paper presents a direction for future commercial credit research that can be adopted:the object of study, from the study of large companies to small and medium-sized enterprises, small and medium-sized enterprises are the most important part of the market directed economy in China. There are more difficulties in terms of access to bank credit or commercial credit for them. With the guidance of theory, companies can better provision and use of commercial credit, then they can promote the improvement of enterprise management level, increase the competitiveness of enterprises, promote better economic development of China’s financialFrom the content of the study, the research analyzed various aspects of the factors affecting the commercial credit, but these studies are very fragmented, and the conclusions often are poles apart. So we had to integrate fragmented theory of systems theory, In-depth study of how various factors effect, affecting the degree of size.