In 2018, the United States imposed multiple waves of import tariff increases, generating exogenous shocks to firms’ input costs and supplier competition. Using these tariff increases as a quasi-natural experiment, we examine how changes in upstream competition affect the use of trade credit by U.S. manufacturing firms. We find that firms more exposed to input tariff shocks significantly reduce their reliance on trade credit. The effect is stronger for smaller firms, firms operating in highly competitive downstream industries, financially constrained firms, and firms with greater pre-existing trade credit reliance. Moreover, the reduction is more pronounced when upstream supplier markets are concentrated, consistent with a bargaining power channel. Overall, our results provide causal evidence that reductions in supplier competition weaken downstream firms’ access to trade credit.

We show that those Chinese listed companies that are riding high on the media corporate social responsibility (CSR) ranking lists tend to have greater advertising (sales) expenses and poor environmental performance. This observation suggests that some companies opportunistically use media to greenwash their image, hoping to capture economic rents. Indeed, our evidence shows that greenwashing firms benefit in the lending market by exploiting the media to gain a kind of environmental, social, and governance (ESG) endorsement, thereby allowing them to achieve a lower cost of debt and to experience lower collateral obligations. The evidence suggests an adverse incentive to exploit ESG awareness via media coverage in weak institutional environments and opaque ESG disclosure regimes.

This paper studies how family ownership influences the cost of debt. Using a sample of Chinese listed firms, we find that family control leads to a higher bond yield-spread. This evidence contradicts the findings in developed markets. We document that the risk of expropriation and financial reporting quality are plausible mechanisms. Besides, Protection of debtholders' rights can mitigate the concern of family expropriation and information asymmetry, and reduce the cost of debt. We also show consistent evidence that family firms generally take less debt and have lower debt maturity due to the high cost. Overall, our results shed light on how family control affects financing costs in the capital market with less protection for creditor rights.

In this study, we examine the effect of media spotlight of corporate environmental, social, and governance (ESG) performance on corporate debt financing. We use the most influential media firm’s rankings of corporate ESG performance from 2009 to 2017 as a proxy of media spotlight. Positive media ESG spotlight significantly reduces firms’ cost of debt through enhancing reputation in supply chains, reducing financial risk and increasing corporate transparency. Media ESG spotlight plays a more important role for firms with poor corporate governance and firms located in provinces with more serious pollution.

This paper sheds light on the monitoring effects of controlling ownership on shareholders’ fraud activities. Using a sample of Chinese listed firms for 2004–2019, our results indicate that the absence of controlling owners increases corporate fraud activities by non-controlling shareholders, but not by managers. The findings remain consistent when using bivariate probit model that incorporates undetected fraud. To establish causality, we conduct difference-in-difference analyses that rely on the ownership variation generated by the exogenous loss of controlling owners and M&A deregulation shocks, respectively. The 2SLS regression employing the collectivist culture as an instrument for control absence confirms our results. To explore the reasons for the increase in fraud due to the absence of controlling owners, we show that shareholders are not motivated to participate and vote in the general meetings when controlling owners are absent, resulting in lower corporate governance quality. However, analysts and short-sellers act effectively as external control mechanisms to prevent corporate fraud when controlling owners are absent.