Customer's High-quality Accounting Information and Debt Default Risk of Suppliers
YI Zhaoying, LIU Jianhua, MA Xinxiao
School of Accounting, Capital University of Economics and Business; Lingnan College, Sun Yat-sen University; Management College/China Business Working Capital Management Research Center, Ocean University of China
Summary:
With the continuous release of credit risk in the bond market, the phenomenon of corporate debt defaults in China tends to be increasingly common with the number and amount of defaults increasing. The debt default risk is closely related to the supply chain. The supplier affects the procurement and cost of the enterprise, while the customer affects the demand and revenue of the enterprise. Once the supply chain is broken down, the enterprise will be unable to operate, which results in debt defaults. In practice, there are many cases of cascading debt defaults due to the bankruptcy of upstream suppliers or downstream customers, which lead to systemic financial risks. How to effectively reduce the debt default risk of Chinese enterprises in the supply chain, prevent and resolve systemic financial risks and maintain the security and stability in the industry chain has become a very important research topic on national governance. Exising srudies on corporate debt default risk. existing studies mainly focus on the macro institutional environment and micro corporate characteristics, but have paid little attention to the spillover effect of accounting information on supply chain debt risk. In practice, suppliers and customers are closely connected, and customers' accounting information has spillover effects on the financing and operation of suppliers, which can subsequently affect the debt default risk. Therefore, we want to explore whether and how customers' high-quality accounting information can reduce the debt default risk of suppliers, and under which conditions the risk mitigation effect will be more obvious. Based on the sample of Shanghai and Shenzhen A-share listed companies from 2008 to 2020, this paper explores the mitigation effect and internal mechanism on how customers' high-quality accounting information affects supplier's debt default risk. We find that: Customers' high-quality accounting information can effectively alleviate the debt default risk faced by suppliers. The mechanism tests show that customers' high-quality accounting information can optimize the operation and management activities of suppliers, enhance their assets value, improve the credit decisions of financial institutions, and reduce the scale of excessive debt of suppliers, thereby mitigating debt default risk. Finally, based on the heterogeneity analysis of macroeconomic uncertainty, supply chain characteristics, and corporate ownership structures, we find that when thesr is slower macroeconomic growth, stronger supply chain economic links or more specific assets, and privately controlled suppliers, customers' high-quality accounting information mitigates suppliers' debt default risk more. Our results remain robust across various tests. The research contributions of this study are as follows: First, it enrich research on influencing factors of corporate debt default risk. Based on the supply chain context, this paper studies the impact of customers' high-quality accounting information on suppliers' corporate debt default risk for the first time. We explore the underlying mechanisms and enrich literature on factors affecting corporate debt default risk. Second, it expands the spillover effect of accounting information within the supply chain. Information spillover effect is common in the supply chain, which has been widely explored in previous studies. This paper theoretically analyzes and empirically tests the spillover effect of customers' high-quality accounting information on suppliers' corporate debt default risk for the first time, and also considers the impacts of heterogeneous factors. It expands uoon the economic consequences of accounting information spillover effects in supply chain. Third, it provides important theoretical guidance and policy recommendations for Chinese enterprises to better resolve debt default risks. Since 2020, macroeconomic growth has slowed down and corporate debt defaults have occurred more frequently making prevention and resolution of systemic financial risks increasingly important. We find that customers' high-quality accounting information can reduce the debt default risk of suppliers, which can effectively curb the contagion and accumulation of debt default risk in supply chain. Our findings provide policy references for maintaining supply chain security and stability and for comprehensively deepening the supply-side structural reform, as emphasized in the report of the 20th National Congress.
衣昭颖, 柳建华, 马新啸. 客户高质量会计信息与供应商债务违约风险[J]. 金融研究, 2024, 531(9): 77-94.
YI Zhaoying, LIU Jianhua, MA Xinxiao. Customer's High-quality Accounting Information and Debt Default Risk of Suppliers. Journal of Financial Research, 2024, 531(9): 77-94.
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