Heterogeneous Impact of Buyer/Supplier Relationships on Corporate Bank Borrowing Capability

Taking China A-share manufacturing listed companies from 2003 to 2015 as the research object, this paper examines the impact of buyer/supplier relationship on Corporate borrowing capacity from banks based on the perspective of bank credit. The study found that:buyer/supplier relationship has a very different impact on Corporate borrowing capacity from banks. The concentration of suppliers is positively correlated with the ability of corporate borrowing, while the customer concentration is negatively related to the ability of corporate borrowing. Further considering property right, we found that state-owned enterprises have stronger borrowing ability than private-owned ones. State-owned enterprises with higher concentration of suppliers are more likely to obtain bank loans than private-owned ones, whereas private-owned enterprises with higher concentration of customers are more likely to lose bank loans than state-owned enterprises. The conclusion of this paper shows that the bank will consider the buyer/supplier relationship of the borrower in the credit decision-making process, and the influence of supplier relationship and customer relationship on bank credit decision-making is very heterogeneous.