We propose that local corruption distorts the allocation of government-controlled resources and impairs the contract environment, thereby reducing firms’ use or suppliers’ provision of trade credit. We use a sample of Chinese-listed firms from 2007 to 2020 to examine the role of local...

This paper examines how institutional characteristics of emerging economies influence the effect of control-ownership divergence on market liquidity. We find that the divergence is negatively associated with liquidity, and that this negative relationship is more pronounced in firms with more...