Research On The Impact Of Excess Goodwill On Trade Credit Financing

According to the concept of excess returns,the goodwill formed by mergers and acquisitions is a resource that can bring excess returns to enterprises in the future and help to enhance corporate value.However,with the blowout growth of mergers and acquisitions,the goodwill generated has also accumulated sharply.Excess goodwill will not only fail to bring the expected synergies,but will consume corporate resources and reduce corporate solvency.Therefore,scholars have conducted in-depth research on the economic consequences of goodwill.As one of the important financing methods of Chinese enterprises,commercial credit financing can enable enterprises to support the normal operation and development by occupying the funds of suppliers in the case of shortage of funds,while suppliers mainly determine whether to provide commercial credit according to the credibility and operating conditions of enterprises.Therefore,some scholars believe that suppliers will regard excess goodwill as a signal of changes in business risks and performance capabilities,thereby reducing the supply of commercial credit.However,as an important governance mechanism of enterprises,external audit can play a role of supervision and signal transmission,and reduce the information asymmetry between the two parties.At the same time,internal control can improve the quality of accounting information and restrain the self-interest behavior of management from the system.Both of them weaken the degree of supplier ’s response to the risk of excess goodwill to a certain extent.Therefore,based on principal-agent theory,information asymmetry theory and signal transmission theory,this thesis studies the relationship between excess goodwill and trade credit financing,and explores the role of internal and external supervision in excess goodwill and trade credit financing.This thesis takes the data of Shanghai and Shenzhen A-share listed companies in China from 2010 to 2021 as the research sample,and the research conclusions are as follows : First,excess goodwill is negatively correlated with trade credit financing,that is,the higher the excess goodwill generated by mergers and acquisitions,the less trade credit financing enterprises can obtain.Second,audit quality has a significant inhibitory effect on the negative correlation between excess goodwill and trade credit financing,and this inhibitory effect is heterogeneous at different levels of marketization.Third,the quality of internal control has a significant inhibitory effect on the negative correlation between excess goodwill and trade credit financing,and this inhibitory effect is heterogeneous in different degrees of industry competition.Fourth,high-quality internal control significantly inhibits the negative impact of excess goodwill on trade credit financing.This conclusion is only valid in the group with low audit quality,but not in the group with high audit quality,indicating that internal control and external audit have a substitution effect on the problem of excess goodwill inhibiting trade credit financing.The conclusions of this thesis show that external audit and internal control play an active role in the supply chain contract process,enrich the relevant literature on corporate governance effectiveness,and are of great significance for regulators and enterprises to make relevant decisions.