The Effect of Industry Competition on Credit Trade

In this paper, we analysis from the supply of trade credit and present a study on the use of an important non-formal financial channel - trade credits - for firms based on Chinese companies from 2000 to 2006. In particular, we compare the use of trade credit between competition industries and non-competition industries firms. To test the difference in the use of trade credit between competition industries and non-competition industries firms, we use the information in the firmspsila financial statements, we found that, compared to non-competition industries, firms in competition industries tend to use more trade credit.