The Influence Of Accounting Information Quality On Trade Credit

As one of the important short-term financing methods,trade credit will be affected by the information asymmetry between enterprises,and accounting information can help investors to assess the risks of enterprises to a certain extent.The disclosure of accounting information could help to ease the information asymmetry,and the quality of accounting information can influence daily operations of enterprises.Previous research on the quality of accounting information at home and abroad mainly focuses on the macro level and the enterprise level.As for trade credit,domestic and foreign research mainly focus on its impact on investment and financing,using motivations and influencing factors of the trade credit.Besides,foreign scholars have also studied the relationship between many trade credits and bank loans.There is a great number of literature on accounting information quality and trade credit,however,few scholars have studied the influence of accounting information quality on trade credit.This study theoretically analyzes the potential relationship between accounting information quality and trade credit,followed by empirically analyzing the influence of accounting information quality on trade credit based on the data of the whole industry for 6 years(from 2012 to 2017),and analyzing if there are differences among different kinds of property rights and different market positions.The empirical study shows that the higher the accounting information quality of enterprises,the more trade credits are obtained with other conditions equal.Further research has found that this phenomenon is more pronounced in companies with higher market positions.In addition,compared to state-owned enterprises,the quality of accounting information is less useful in non-state-owned enterprises in the process of trade credit financing.After the empirical analysis,this study selects the leading enterprise in the real estate industry,Greenland Group Co.,Ltd.as a specific case.After briefly introducing the company profile and the development status of the real estate industry,it further analyzes the influence of accounting information quality on trade credit.The results show that the higher the quality of accounting information,the more trade credits obtained,verifying the original assumption.Additionally,different market positions also have different effects on these two.However,the impact of the nature of property rights on these two is not significant in the real estate industry,which may be related to the particularity of the real estate industry.Through empirical analysis and case analysis,this paper summarizes the conclusions of the study at the end,pointing out that this study has realistic guiding significance for enterprises to improve the quality of accounting information and obtain more trade credits.So that enterprises can further expand their scale and improve their development capabilities.At the same time,this paper also puts forward suggestions on the relevant measures that the government can take.It is expected that thegovernment can further revise and standardize the accounting information disclosure system of listed companies,improve the accounting information quality of listed companies from the rules and regulations.Besides,the government are supposed to further deepen its market-oriented reforms and the separation of government and enterprises for state-owned enterprises,and expand the trade credit financing channels of non-state-owned enterprises.All measures above aim to create a fair market competition environment for state-owned enterprises and non-state-owned enterprises,and to help promote the development of Chinese enterprises in the current market.