Is There Trade Credit Channel for Monetary Policy in China? —— Empirical Evidence from the A-share Manufacturing Listed Companies
DU Jian-hua1,2
1.School of Business Administration, Henan University, Kaifeng 475004,China; 2.School of Finance, Zhongnan University of Economics and Law, Wuhan 430223,China
Abstract：
When companies substitute trade credit for bank credit during periods of tight monetary policy, trade credit channel of monetary policy transmission operates. Using the panel data of A-share manufacturing listed companies covering period from 2004 to 2010,this paper tests and verifies the existence of trade credit channel, and finds that it is diverted to trade credit to support inventory investment growth during periods of tight monetary policy which plays an offsetting effect on contractionary monetary policy. Further research discusses the heterogeneity of trade credit channel, and finds that this channel exists only in state-owned listed companies and weaker bank-dependence companies. This paper stresses the important role of informal finance which is represented by trade credit.
DU Jian-hua.Is There Trade Credit Channel for Monetary Policy in China? —— Empirical Evidence from the A-share Manufacturing Listed Companies[J] Economic Survey, 2014,V31(6): 149-153
2014 
