Impact of trade credit on innovation performance: the mediating roles of information sharing and collaborative R&D

Trade credit, vital in operations and supply chain management, has been extensively studied for its financial and operational impact, but a gap exists in its role in innovation performance. Grounded in social exchange theory, our study employs a conceptual framework to explore trade credit's association with innovation, covering product and process aspects. Leveraging data from the China Enterprise Survey conducted by the World Bank, encompassing 1,643 firms, we employ regression analysis to scrutinise the influence of trade credit on innovation performance. We also delve into the mediating mechanisms of information sharing and collaborative R&D. The findings reveal a positive correlation between trade credit and a firm's innovation performance. Moreover, trade credit exerts its impact on product innovation through information sharing and collaborative R&D, while it predominantly supports process innovation via information sharing. This research enhances supply chain management literature by detailing the nuanced relationship between trade credit and innovation performance.