Collecting data from Chinese listed firms from 2005 to 2013，the paper develops a measure of prod-uct market competition advantage ( or PMCA) ，and investigates the effect of PMCA on capital structure and trade credit supply as well as the moderating role of macro，industry，and micro factors． It is found that firms with PMCA have lower capital structure and higher trade credit supplies to their suppliers or customers． More-over，the effect of PMCA on capital structure and trade credit supply is greater in fast-growing economic re-gions，weakly competitive industries，and non-state-owned firms． Overall，the paper provides new evidence to a better understanding of the effect of PMCA on capital structure and trade credit supply．