Research Article
Digital Finance and Asymmetric Trade Credit Allocation in Chinese Manufacturing: Supplier Dependence and Firm Markups
Shiwang Huang
,
Kaiyrbek Makulov*
Issue:
Volume 14, Issue 5, October 2026
Pages:
213-225
Received:
4 August 2026
Accepted:
17 August 2026
Published:
9 September 2026
DOI:
10.11648/j.jfa.20261405.11
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Abstract: Digital finance may reshape not only firms’ access to formal financial services but also the allocation of trade credit within supply chains. This study examines whether regional digital finance is associated with asymmetric changes in payment terms and whether supplier dependence conditions the economic consequences of such changes. Using 14,159 firm-year observations for Chinese A-share manufacturing firms from 2011 to 2021, the study matches firm-level financial, trade-credit, supply-chain concentration, and markup data with the prefecture-level Peking University Digital Financial Inclusion Index. Estimates with firm and time fixed effects show that digital finance is positively associated with the payable-period indicator but is not significantly related to the receivable-period indicator, indicating an asymmetric reallocation of trade credit toward purchasing firms. Coverage breadth and usage depth, rather than the technical digitization component alone, are primarily associated with this pattern. The payable-period indicator is positively associated with three alternative markup measures, suggesting that payment-term flexibility may support operating liquidity or reflect stronger buyer bargaining power. However, the direct association between digital finance and firm markups is sensitive to markup measurement, province-by-year fixed effects, and lagged specifications. Supplier concentration and overall supply-chain concentration significantly weaken the markup association of digital finance, whereas customer concentration has no statistically significant moderating effect. Robustness checks, leave-one-province-out estimates, and permutation tests support the contemporaneous relationships, although they do not establish definitive causality. The findings identify asymmetric trade-credit allocation as an important channel through which digital finance affects manufacturing firms and show that upstream supplier dependence limits firms’ ability to retain the resulting financial and operating advantages.
Abstract: Digital finance may reshape not only firms’ access to formal financial services but also the allocation of trade credit within supply chains. This study examines whether regional digital finance is associated with asymmetric changes in payment terms and whether supplier dependence conditions the economic consequences of such changes. Using 14,159 f...
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