lynx   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/aif/journl/v4y2020i2p1-30.html
   My bibliography  Save this article

Firm Power in Industrial Chain and Debt Financing

Author

Listed:
  • Nicolas Diodji Mamadou FAYE
  • FAN Libo
  • Conghui Hu
  • Kokou Wotodjo Tozo
  • Mouanda-Mouanda Gilhaimé
Abstract
This article explores the impact of corporate value chain power on its external financing liabilities, public debt financing, and corporate performance. This study has collected cross-sectional data of 13,653 firms from the Corporate Bond Market from 2006 to 2016. The results show that the companies with greater power in the value chain have a lower proportion of financing liabilities. This finding indicates that companies with higher value chain power use less financing liabilities and tend to use non-cost commercial credit for financing. The empirical results show that although there is no significant relationship between the power of the corporate value chain and the convenience of public bond financing in all samples, for small-scale and high-growth enterprises, the greater the value chain power, the greater the scale of bond financing, the greater the cost, the lower the bond issue cost. Finally, this article reveals that small-scale, high-growth companies with higher value chain power have better financial performance.

Suggested Citation

  • Nicolas Diodji Mamadou FAYE & FAN Libo & Conghui Hu & Kokou Wotodjo Tozo & Mouanda-Mouanda Gilhaimé, 2020. "Firm Power in Industrial Chain and Debt Financing," International Journal of Science and Business, IJSAB International, vol. 4(2), pages 1-30.
    • Handle: RePEc:aif:journl:v:4:y:2020:i:2:p:1-30
    as

    Download full text from publisher

    File URL: https://ijsab.com/wp-content/uploads/481.pdf
    Download Restriction: no
    File URL: https://ijsab.com/volume-4-issue-2/2630
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Chabowski, Brian & Chiang, Wen-Chyuan & Deng, Kailing & Sun, Li, 2019. "Environmental inefficiency and bond credit rating," Journal of Economics and Business, Elsevier, vol. 101(C), pages 17-37.
    2. Nicholas Wilson & Barbara Summers, 2002. "Trade Credit Terms Offered by Small Firms: Survey Evidence and Empirical Analysis," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 29(3‐4), pages 317-351, April.
    3. Nicholas Wilson & Barbara Summers, 2002. "Trade Credit Terms Offered by Small Firms: Survey Evidence and Empirical Analysis," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 29(3&4), pages 317-351.
    4. Christopher M. Snyder, 1996. "A Dynamic Theory of Countervailing Power," RAND Journal of Economics, The RAND Corporation, vol. 27(4), pages 747-769, Winter.
    5. Fabbri, Daniela & Menichini, Anna Maria C., 2010. "Trade credit, collateral liquidation, and borrowing constraints," Journal of Financial Economics, Elsevier, vol. 96(3), pages 413-432, June.
    6. Biais, Bruno & Gollier, Christian, 1997. "Trade Credit and Credit Rationing," The Review of Financial Studies, Society for Financial Studies, vol. 10(4), pages 903-937.
    7. Mike Burkart & Tore Ellingsen, 2004. "In-Kind Finance: A Theory of Trade Credit," American Economic Review, American Economic Association, vol. 94(3), pages 569-590, June.
    8. Campello, Murillo & Gao, Janet, 2017. "Customer concentration and loan contract terms," Journal of Financial Economics, Elsevier, vol. 123(1), pages 108-136.
    9. Liu, Yixin & Jiraporn, Pornsit, 2010. "The effect of CEO power on bond ratings and yields," Journal of Empirical Finance, Elsevier, vol. 17(4), pages 744-762, September.
    10. J. Stephen Ferris, 1981. "A Transactions Theory of Trade Credit Use," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 96(2), pages 243-270.
    11. Morgan, Neil A. & Slotegraaf, Rebecca J. & Vorhies, Douglas W., 2009. "Linking marketing capabilities with profit growth," International Journal of Research in Marketing, Elsevier, vol. 26(4), pages 284-293.
    12. Borghesani, William H. & de la Cruz, Peter L. & Berry, David B., 1997. "Controlling the chain: buyer power, distributive control, and new dynamics in retailing," Business Horizons, Elsevier, vol. 40(4), pages 17-24.
    13. He, Wei & Kyaw, NyoNyo A., 2018. "Capital structure adjustment behaviors of Chinese listed companies: Evidence from the Split Share Structure Reform in China," Global Finance Journal, Elsevier, vol. 36(C), pages 14-22.
    14. Joshua Abor, 2005. "The effect of capital structure on profitability: an empirical analysis of listed firms in Ghana," Journal of Risk Finance, Emerald Group Publishing Limited, vol. 6(5), pages 438-445, December.
    15. Snyder, Christopher M., 1998. "Why do larger buyers pay lower prices? Intense supplier competition," Economics Letters, Elsevier, vol. 58(2), pages 205-209, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tarkom, Augustine & Yang, Lukai, 2024. "Presidential economic approval rating and trade credit," International Review of Financial Analysis, Elsevier, vol. 93(C).
    2. Cheng, Linyin, 2024. "Does digital transformation matter for trade credit provision? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 86(C).
    3. Mateut, Simona & Mizen, Paul & Ziane, Ydriss, 2015. "Inventory composition and trade credit," International Review of Financial Analysis, Elsevier, vol. 42(C), pages 434-446.
    4. Fabbri, Daniela & Klapper, Leora, 2008. "Market power and the matching of trade credit terms," Policy Research Working Paper Series 4754, The World Bank.
    5. Fabbri, Daniela & Klapper, Leora F., 2016. "Bargaining power and trade credit," Journal of Corporate Finance, Elsevier, vol. 41(C), pages 66-80.
    6. Mabel D. Costa & Ahsan Habib, 2021. "Trade credit and cost stickiness," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(1), pages 1139-1179, March.
    7. Mariarosaria Agostino & Francesco Trivieri, 2014. "Does trade credit play a signalling role? Some evidence from SMEs microdata," Small Business Economics, Springer, vol. 42(1), pages 131-151, January.
    8. Abdulla, Yomna & Dang, Viet Anh & Khurshed, Arif, 2020. "Suppliers' listing status and trade credit provision," Journal of Corporate Finance, Elsevier, vol. 60(C).
    9. Bougheas, Spiros & Mateut, Simona & Mizen, Paul, 2009. "Corporate trade credit and inventories: New evidence of a trade-off from accounts payable and receivable," Journal of Banking & Finance, Elsevier, vol. 33(2), pages 300-307, February.
    10. Afrifa, Godfred Adjapong & Gyapong, Ernest & Monem, Reza M., 2018. "Product differentiation, market dynamics and the value relevance of trade payables: Evidence from UK listed firms," Journal of Contemporary Accounting and Economics, Elsevier, vol. 14(3), pages 235-253.
    11. Bahadir Karakoç, 2023. "Working Capital Management and Performance in Financially Dependent Firms: Evidence from Developing Asian Economies," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 9(1), pages 37-55.
    12. Wahyu Jatmiko & M. Shahid Ebrahim & Abdullah Iqbal & Rafal M. Wojakowski, 2023. "Can trade credit rejuvenate Islamic banking?," Review of Quantitative Finance and Accounting, Springer, vol. 60(1), pages 111-146, January.
    13. Singh, Amanjot, 2022. "Hedge fund activism and trade credit," Global Finance Journal, Elsevier, vol. 53(C).
    14. Fabbri, Daniela & Menichini, Anna Maria C., 2010. "Trade credit, collateral liquidation, and borrowing constraints," Journal of Financial Economics, Elsevier, vol. 96(3), pages 413-432, June.
    15. Gyimah, Daniel & Machokoto, Michael & Sikochi, Anywhere (Siko), 2020. "Peer influence on trade credit," Journal of Corporate Finance, Elsevier, vol. 64(C).
    16. Aktas, Nihat & Bodt, Eric de & Lobez, Frédéric & Statnik, Jean-Christophe, 2012. "The information content of trade credit," Journal of Banking & Finance, Elsevier, vol. 36(5), pages 1402-1413.
    17. Safiullah, Md & Nguyen, Linh Thi My, 2024. "Does firm-level carbon assurance matter for trade credit?," Finance Research Letters, Elsevier, vol. 68(C).
    18. Fabbri, Daniela & Menichini, Anna Maria C., 2016. "The commitment problem of secured lending," Journal of Financial Economics, Elsevier, vol. 120(3), pages 561-584.
    19. Bertrand, Jérémie & Murro, Pierluigi, 2022. "Firm–bank “odd couples” and trade credit: Evidence from Italian small- and medium-sized enterprises," Economic Modelling, Elsevier, vol. 111(C).
    20. Massimo Omiccioli, 2005. "Trade Credit as Collateral," Temi di discussione (Economic working papers) 553, Bank of Italy, Economic Research and International Relations Area.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aif:journl:v:4:y:2020:i:2:p:1-30. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Farjana Rahman (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.
    Лучший частный хостинг