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(Waikong) Cheung, Wee Ching Pok  \nPII: S1815-5669(19)30087-6  \nDOI: [https://doi.org/10.1016/j.jcae.2019.100159](https://doi.org/10.1016/j.jcae.2019.100159)  \nArticle Number: 100159  \nReference: JCAE 100159  \nTo appear in: Journal of Contemporary Accounting & Economics  \nReceived Date: 16 August 2018  \nRevised Date: 3 May 2019  \nAccepted Date: 5 June 2019  \nPlease cite this article as: Cheung, A., Pok, W.C., Corporate Social Responsibility and Provision of Trade Credit, Journal of Contemporary Accounting & Economics (2019), doi: [https://doi.org/10.1016/j.jcae.2019.100159](https://doi.org/10.1016/j.jcae.2019.100159)  \n[This is a PDF file of an unedited manuscript that has been accepted for publication. As a service to our customers](This is a PDF file of an unedited manuscript that has been accepted for publication. As a service to our customers)[ ](This is a PDF file of an unedited manuscript that has been accepted for publication. As a service to our customers)[we are providing this early version of the manuscript. The manuscript will undergo copyediting](we are providing this early version of the manuscript. The manuscript will undergo copyediting), typesetting, and review of the resulting proof before it is published in its final form. Please note that during the production process errors may be discovered which could affect the content, and all legal disclaimers that apply to the journal pertain.  \nCorporate Social Responsibility and Provision of Trade Credit  \nAdrian (Waikong) Cheung*, Wee Ching Pok  \nFlinders Business, College of Business, Government and Law, Flinders University, Australia  \n* Corresponding author: Flinders Business, College of Business, Government and Law, Flinders University. Address: Bedford Park Campus, Stuart Road, Adelaide, SA5042, Australia. Email address: [adrian.cheung@flinders.edu.au. Phone:](adrian.cheung@flinders.edu.au. Phone:) (+618) 8201 5831.  \nFor their helpful comments and suggestions, we would like to thank Felix Chan, Lingsha Cheng, Robert Durand, Brenton Fiedler, Thanh Le, Phil Palmer, Lee Smales, Erkan Yalcin, Yonghong Zhou and the participants at the seminars at Curtin University and Flinders University. Any errors are our own.  \nCorporate social responsibility and provision of trade credit  \nAbstract  \nIn this article, we identify and examine three different views of corporate social responsibility (CSR) and the relationship between CSR and firms’ provision of trade credit. The trust view of CSR argues that CSR and trade credit provision are related positively, because CSR, as a trustenhancing device, complements the incomplete contract nature of trade credit. The CSR literature shows that CSR firms tend to have higher cash holdings. With this in mind, the precautionary motive view of CSR suggests that cash holdings serve as a hedge against trade credit risk, while, on the other hand, the substitution view of CSR predicts that cash hoarding discourages the provision of trade credit. Using a dataset of 20,591 firm-year observations from 1991 to 2015, we find strong evidence that supports both the trust and substitution views of CSR but not the precautionary view of CSR.  \nJEL Classification: G01, G32, M14  \nKeywords: Corporate social responsibility, Trade credit, Accounts receivable, Trust, Incomplete contract, Precautionary motive view, Substitution view  \nCorporate social responsibility and provision of trade credit  \n1. Introduction   \nTrade credit is an important and pervasive component of a wide range of business activities. Trade credit, or delayed payment for intermediate goods, is one of the most prevalent financial arrangements in procurement relationships, and statistics suggest that it finances roughly two-thirds of global trade (Bank for International Settlements, 20 14) . As at September 2016, the amount of accounts payable owed by non-financial US firms to their suppliers was","cbCaisyAe0r7Mm9L","https://ap.wps.com/l/cbCaisyAe0r7Mm9L","pdf",510257,49,"English","# Introduction\n## Trade credit as a pervasive financing arrangement\n## Risk–sales trade-off in extending trade credit terms\n# Abstract and Research Focus\n## Competing CSR views and predicted effects\n## Empirical approach and findings","[{\"question\":\"What relationship does the trust view propose between CSR and trade credit provision?\",\"answer\":\"The trust view argues CSR and trade credit provision are positively related because CSR enhances trust and complements the incomplete-contract nature of trade credit.\"},{\"question\":\"How do the precautionary motive and substitution views differ in predicting trade credit?\",\"answer\":\"The precautionary motive view suggests cash holdings hedge trade credit risk, while the substitution view predicts cash hoarding discourages trade credit provision.\"},{\"question\":\"What do the empirical results (1991–2015) indicate about the three CSR views?\",\"answer\":\"Results provide strong support for both the trust and substitution views of CSR, but do not support the precautionary view.\"}]","Corporate Social Responsibility and Provision of Trade Credit - Accepted Manuscript | PDF",1789940298,123]