International evidence on state ownership and trade credit: Opportunities and motivations.

ABSTRACT: Recent events, most notably the Global Financial Crisis and the COVID-19 pandemic, have made it increasingly apparent that liquidity is synonymous with corporate survival. In this paper, we explore how governments can fulfill an important need as suppliers of liquidity. Building on the financing advantage view of state ownership, we theorize how state-owned enterprises (SOEs) may provide capital by offering trade credit to customer firms. The data indicate a positive relation between the level of state ownership and the provision of trade credit. Using an institution-focused framework, we further determine that the nation's institutional environment systematically affects the opportunities and motivations for SOEs to grant trade credit. Specifically, we find that SOEs grant more trade cred

SUBMITTER: Chen R 

PROVIDER: S-EPMC7930522 | biostudies-literature | 2021

REPOSITORIES: biostudies-literature