{"title":"How does top management team recomposition affect corporate trade credit financing","authors":"Shuai Xu , Suge Zhang , Chen Cheng","doi":"10.1016/j.irfa.2025.104108","DOIUrl":null,"url":null,"abstract":"<div><div>We empirically examine the impact of top management team (TMT) recomposition on corporate trade credit financing. Utilizing a sample of A-share listed firms in China from 2009 to 2022, we discover that TMT recomposition exhibits a negative and significant correlation with corporate trade credit financing. Our finding remains robust after addressing endogeneity concerns and conducting rigorous tests for verification. This effect is particularly pronounced among firms with younger management teams and core executive turnover. Mechanism tests reveal that a restructured TMT may erode credit providers' trust by heightening operational risks and diminishing the quality of disclosed information. This underscores the importance of reducing operational risks and enhancing transparency in information as crucial pathways for securing trade credit financing. This study aids in comprehending the significance of a steadfast top management team and its internal mechanisms, offering clear implications for enhancing corporate trade credit financing.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"102 ","pages":"Article 104108"},"PeriodicalIF":7.5000,"publicationDate":"2025-03-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Review of Financial Analysis","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1057521925001954","RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
How does top management team recomposition affect corporate trade credit financing
We empirically examine the impact of top management team (TMT) recomposition on corporate trade credit financing. Utilizing a sample of A-share listed firms in China from 2009 to 2022, we discover that TMT recomposition exhibits a negative and significant correlation with corporate trade credit financing. Our finding remains robust after addressing endogeneity concerns and conducting rigorous tests for verification. This effect is particularly pronounced among firms with younger management teams and core executive turnover. Mechanism tests reveal that a restructured TMT may erode credit providers' trust by heightening operational risks and diminishing the quality of disclosed information. This underscores the importance of reducing operational risks and enhancing transparency in information as crucial pathways for securing trade credit financing. This study aids in comprehending the significance of a steadfast top management team and its internal mechanisms, offering clear implications for enhancing corporate trade credit financing.
期刊介绍：
The International Review of Financial Analysis (IRFA) is an impartial refereed journal designed to serve as a platform for high-quality financial research. It welcomes a diverse range of financial research topics and maintains an unbiased selection process. While not limited to U.S.-centric subjects, IRFA, as its title suggests, is open to valuable research contributions from around the world.
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