Short selling and trade credit: New evidence

• DOI: 10.1016/j.bir.2023.10.006
• Publication Date: 2023-11-05T15:35:09Z
• Authors: Xin Xiang; Xu He
• Keywords: Trade Credit; Deregulation; Sample (material)

This study investigates the effect of short sales on firms' use trade credit. Using a sample 3262 Chinese listed firms from 2007 to 2019, analysis results show that both deregulation and magnitude negatively affect The transmission mechanism indicates access formal financing decreases after deregulation, which mitigates firms’ ability redistribute through Moreover, suggest shortable tend adopt moderate credit policy adjust their target level at lower rate than non-shortable firms. reveals features sales–trade relationship in an emerging market.