A Study On The Effect Of CEO Reputation On Corporate Trade Credit

Trade credit is essentially a corporate fund lending activity that occurs on the basis of understanding and trust,which can ease corporate financing constraints.Besides,corporate can compete in the market by providing trade credit to expand sales.Therefore,whether a company can obtain or provide trade credit is closely related to the future survival and the development of the company.In China,with the rapid development of market economy and the transformation of social structure,reputation-based trust becomes increasingly evident.CEO reputation is not only one important signal for companies to win trust.but also can help companies increase their visibility and influence,thus increasing their market competitiveness.So,it is of great significance to study the influence of CEO reputation on the trade credit.Therefore,this paper takes the sample of A-share listed companies from 2003 to 2015,and use the CEO media news to examine not only the effects of CEO's reputation on the corporate trade credit obtain,giving,net credit financing and its transaction cost,but also under different trust environments how these effects change.The research results show:(1)The CEO reputation has a remarkably positive impact on the acquisition of trade credit.The higher CEO reputation,the more credit financing the company obtains.(2)The CEO reputation is negatively related to the trade credit giving,but not significant,which means they have no significant relationship.(3)The higher CEO reputation,the more net credit the company obtains,and this effect is more significant in the China's private enterprises.(4)In the areas with low level of social trust,CEO reputation has more significant impact.CEO reputation and the corporate external trust environment are alternative.(5)CEO reputation can reduce trade credit transaction cost,that i s,less use of higher-cost credit models such as notes payable and prepayments.(6)In the further research of CEO news emotion analysis,the positive news of CEO can help companies obtain trade credit,however,the increase of CEO negative news reduces tra de credit.Finally,this paper puts forward some relevant suggestions on the optimization of corporate trade credit system and CEO reputation in China,hoping to provide reference for the development of trade credit financing and the reputation-based trust.