RESEARCH ARTICLE
Beggars cannot be choosers? Legitimacy deficiency and the use of trade credit by family firms
Qi Wu,
Jing Xu,
Boliang Song,
Bin Liu,
Qi Wu
Department of Management Science, School of Management, Xiamen University, Xiamen, China
Search for more papers by this authorJing Xu
Department of Accounting, School of Management, Xiamen University, Xiamen, China
Search for more papers by this authorBoliang Song
Department of Finance, School of Management, Xiamen University, Xiamen, China
Search for more papers by this authorCorresponding Author
Bin Liu
MBA Center, School of Management, Xiamen University, Xiamen, China
Correspondence
Bin Liu, MBA Center, School of Management, Xiamen University, Xiamen, China.
Email: [email protected]
Search for more papers by this authorQi Wu,
Jing Xu,
Boliang Song,
Bin Liu,
Qi Wu
Department of Management Science, School of Management, Xiamen University, Xiamen, China
Search for more papers by this authorJing Xu
Department of Accounting, School of Management, Xiamen University, Xiamen, China
Search for more papers by this authorBoliang Song
Department of Finance, School of Management, Xiamen University, Xiamen, China
Search for more papers by this authorCorresponding Author
Bin Liu
MBA Center, School of Management, Xiamen University, Xiamen, China
Correspondence
Bin Liu, MBA Center, School of Management, Xiamen University, Xiamen, China.
Email: [email protected]
Search for more papers by this authorAbstract
While prior literature conceives financial distress as the primary driver of trade credit usage, organisational idiosyncratic characteristics and the situated institutional environment may also play a role. Building on the legitimacy-based view, this study investigates whether family firms (FFs) – a special group of firms that are relatively understudied in the finance and accounting literature – in transitioning economies like China exhibit unique patterns of the use of trade credit. We found that increased family ownership leads to more usage of trade credit. Such inclination is stronger among FFs undergoing intergenerational succession, whereas it is weaker for FFs located in more developed subnational regions.
Open Research
DATA AVAILABILITY STATEMENT
The data that support the findings of this study are available on request from the corresponding author. These data were derived from the following resources available in the public domain: China Stock Market & Accounting Research (CSMAR) (https://data.csmar.com/) and Chinese Research Data Services Platform (CNRDS) (https://www.cnrds.com/).
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