Year: 2025
Type: article
Abstract: Based on data from A-share listed companies in China between 2008 and 2023, this paper examines the impact of earnings smoothing on trade credit financing and its underlying mechanisms. The findings reveal that earnings smoothing significantly enhances firms' access to trade credit by reducing earnings volatility, mitigating information asymmetry, and signaling operational stability to suppliers. Further analysis indicates that informative earnings smoothing has a positive effect on trade credit financing, whereas opportunistic earnings smoothing shows no significant influence. Additionally, the legal environment and social trust negatively moderate this relationship, suggesting that the positive effect of earnings smoothing weakens in regions with stronger institutional frameworks.
DOI: 10.54097/j3x3v580
Author: Yixuan Chen
Institution: Nanjing University of Science and Technology
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4415139434