How does firms’ integrated market power affect upstream trade credit and institutional ownership? Evidence from Taiwan

This paper investigates how a firm's integrated market power affects upstream trade credit and institutional ownership in emerging markets. Using data from the Taiwan Economic Journal (TEJ) for the period 1996–2017, and combining factor analysis as well as a variety of regression models, we show that firms' integrated market power (IMP) is negatively correlated to the use of upstream trade credit. We also document that highly integrated market power firms can attract not only foreign institutional investors but also domestic institutional investors. Furthermore, the effect of market power is consistent across the electronic and traditional sectors; however, the impact of market power is larger in the electronic sector than in the traditional sector.