A Study On The Relationship Between Supply Chain Relationship And Supply And Demand Of Trade Credit In The Steel Industry

At present,our financial system and capital market are not perfect,many firms face fewer financing channels,more financing restriction conditions and high financing costs.By contrast,commercial credit,which relies on supply chains rather than financial institutions,is an alternative form of short-term financing for companies.Business credit involves items payable(such as notes payable,advances and accounts payable)and items receivable(such as notes receivable,prepayments and accounts receivable).The former is called enterprise commercial credit demand,while the latter forms enterprise commercial credit supply.From balance sheet,each enterprise has different accounts payable and levels of accounts payable.An important question is: What factors determine the different demand and supply levels of business credit for enterprises?Based on the existing literature,this thesis argues supplier and customer concentration are the key factors determine the demand and supply of business credit financing.Thus,from the view of upstream and downstream of supply chain,this thesis takes supply chain concentration degree as explanatory variables,and commercial credit financing demand and supply as explained variables to conduct empirical research.Taking the data of the top 40 listed companies in the steel industry from 2006 to2021 as samples,a panel regression model is established to test the influence of supplier concentration and customer concentration on the demand and supply of commercial credit.The empirical results show that:(1)the higher the customer concentration of steel enterprises,the more commercial credit supply,while the supplier concentration has no significant effect on commercial credit supply;(2)The commercial credit demand of iron and steel enterprises is almost not affected by the relationship between suppliers and customers;(3)Compared with other industries,the internal control quality of enterprises in the iron and steel industry has no significant impact on business credit.The main contribution is: from the view of supply chain relations,it examines the factors affect supply and demand of firm’s commercial credit,and makes an empirical study,to help deepen understanding of enterprises’ commercial credit behavior.