Institutional cross‐ownership and trade credit: Evidence from China
研究发现，在中国上市公司中，机构交叉持股能帮助企业获得更多商业信用，尤其在竞争激烈或信息环境较差的企业中效果更明显。
Abstract Research Question/Issue Relying on enhanced market power and improved information environment associated with institutional cross‐ownership, this paper examines the relation between institutional cross‐ownership and trade credit in China. Research Findings/Insights Listed firms with cross‐ownership can obtain more trade credit. The main conclusion is robust when we consider endogeneity problems, alternative measures of institutional cross‐ownership, and the effect of a financial crisis. Further, we perform several tests to examine the influencing mechanisms, confirming that the positive relation between institutional cross‐ownership and trade credit is more pronounced for listed firms in more competitive industries, or with poorer information environment. Further analysis also finds that the positive effect of institutional cross‐ownership on trade credit is more prominent for listed firms with fewer bank loans. Theoretical/Academic Implications This paper emphasizes information sharing and cooperation among listed firms with institutional cross‐ownership and argues that the information improvement effect is a relatively more important mechanism in affecting listed firms' decisions. Practitioner/Policy Implications China's market‐oriented reform is in progress and shows some weaknesses in corporate governance and investor protection. The research focusing on institutional cross‐ownership can provide useful suggestions for policy makers on how to improve corporate governance and construct efficient capital markets.