Does trade credit facilitate high-quality development in agricultural enterprises? – Insights from Chinese enterprises

Abstract

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Agriculture is crucial for the economy and individuals, and there is a pressing need to improve its quality, efficiency, and competitiveness in emerging countries. This study uses data from Chinese-listed companies to investigate the effect of trade credit on agricultural firms’ total factor productivity. The results demonstrate that trade credit access and provision can increase agribusinesses’ total factor productivity. Heterogeneity analysis reveals that access to business credit has a higher contribution to total factor productivity for agribusinesses in the primary sector, for firms in the versus maturity stage, and with low or medium supplier concentration. The provision of trade credit has a more pronounced positive impact on agribusinesses in the maturing stage and enterprises with low or medium customer concentration. This paper further validates the channels of action through which trade credit affects a firm’s high-quality development. This research makes a valuable contribution to enhancing the quality and productivity of China’s agricultural sector.

Keywords

• trade credit
• agribusiness
• total factor productivity
• high-quality development system
• entropy approach