THESIS
2021
1 online resource (xi, 27 pages) : color illustrations
Abstract
Using a policy requiring state-own legal-person shareholders to sell or transfer 10% of
their shares to National Social Security Fund as instrument, I demonstrate a causal effect
of total state-owned corporate shares on trade credit using Difference in Difference. I find
that the proportion of state-owned corporate share is both negatively correlated with the
amount of trade credit issued as well as received by firms. A 1% decrease in state-owned
corporate share leads to a 0.35% increase in trade credit issued and a 0.29% increase in
trade credit received. The increase of reliance on trade credit suggests that the decrease
of state-owned corporate share brings compounded effects. On one hand, it can lead to
less access to finance; On the other hand, it increases cost of enforcement of d...[
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Using a policy requiring state-own legal-person shareholders to sell or transfer 10% of
their shares to National Social Security Fund as instrument, I demonstrate a causal effect
of total state-owned corporate shares on trade credit using Difference in Difference. I find
that the proportion of state-owned corporate share is both negatively correlated with the
amount of trade credit issued as well as received by firms. A 1% decrease in state-owned
corporate share leads to a 0.35% increase in trade credit issued and a 0.29% increase in
trade credit received. The increase of reliance on trade credit suggests that the decrease
of state-owned corporate share brings compounded effects. On one hand, it can lead to
less access to finance; On the other hand, it increases cost of enforcement of debt. When encountered with state share decrease, the disadvantage of higher enforcement cost may
outweigh that of negative liquidity shocks.
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