Abstract: The paper investigates the impact of intergenerational succession on family firms' trade credit financing based on the perspective of succession process. We find that:(1) in the period of new generation's initial involvement in management, the new generation plays non-critical role in family firms and thus family succession has no significant effect on trade credit financing. (2) in the period of co-management by both old and new generations, intergenerational succession has a negative impact on trade credit financing, and this effect is especially significant in family firms that have more than one successors in the new generation. (3) in the period of takeover by new generation, intergenerational succession has a positive impact on trade credit financing, and this effect is especially significant in family firms whose successors have overseas experience. Further analysis shows that both the negative effect in the period of co-management and the positive effect in the period of takeover are more significant in firms located in areas with better institutional environment and in firms with stronger market power. The paper focuses on the trade credit, which plays a significant role in the financing activity of family firms, providing reference for family leaders to make financing strategies aimed at the specific succession stage.

Key words: family business, intergenerational succession, trade credit financing