Tang, YingXu, LuGuo, ShijunMoro, Andrea2023-03-162023-03-162023-02-02Tang Y, Xu L, Guo S, Moro A. (2023) Trade credit and firm efficiency: evidence from Chinese manufacturing firms, Emerging Markets Finance and Trade , Volume 59, Issue 7, 2023, pp. 2204-22161540-496Xhttps://doi.org/10.1080/1540496X.2023.2168477https://dspace.lib.cranfield.ac.uk/handle/1826/19301Our work focuses on the impact of trade credit financing on firm efficiency exploiting a sample of Chinese manufacturing listed firms for the period 2004 to 2018. We find that trade credit significantly improves firm efficiency. This positive association is stronger in firms located in regions with higher levels of social trust, during periods with higher economic policy uncertainty and in times of economic downturn. We reveal three economic mechanisms underlying our baseline findings: alleviating financial constraints, mitigating agency conflicts, and reducing transaction costs.enAttribution-NonCommercial 4.0 Internationalhttp://creativecommons.org/licenses/by-nc/4.0/Trade creditfirm efficiencydata envelopment analysisChinaArticle1558-0938