The Experts below are selected from a list of 31404 Experts worldwide ranked by ideXlab platform
Inessa Love - One of the best experts on this subject based on the ideXlab platform.
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Trade Credit And Bank Credit : Evidence From Recent Financial Crises - Trade Credit and bank Credit: Evidence from recent financial crises
Journal of Financial Economics, 2007Co-Authors: Inessa Love, Lorenzo A. Preve, Virginia Sarria-allendeAbstract:Abstract This paper studies the effect of financial crises on Trade Credit for a sample of 890 firms in six emerging economies. Although the provision of Trade Credit increases right after a crisis, it contracts in the following months and years. Firms that are financially more vulnerable to crises extend less Trade Credit to their customers. We argue that the decline in aggregate Trade Credit ratios is driven by the reduction in the supply of Trade Credit that follows a bank Credit crunch, consistent with the “redistribution view” of Trade Credit provision, whereby bank Credit is redistributed via Trade Credit from financially stronger firms to weaker firms.
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Trade Credit and bank Credit evidence from recent financial crises
Journal of Financial Economics, 2005Co-Authors: Inessa Love, Lorenzo A. Preve, Virginia SarriaallendeAbstract:Abstract This paper studies the effect of financial crises on Trade Credit for a sample of 890 firms in six emerging economies. Although the provision of Trade Credit increases right after a crisis, it contracts in the following months and years. Firms that are financially more vulnerable to crises extend less Trade Credit to their customers. We argue that the decline in aggregate Trade Credit ratios is driven by the reduction in the supply of Trade Credit that follows a bank Credit crunch, consistent with the “redistribution view” of Trade Credit provision, whereby bank Credit is redistributed via Trade Credit from financially stronger firms to weaker firms.
Virginia Sarria-allende - One of the best experts on this subject based on the ideXlab platform.
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International evidence on the determinants of Trade Credit provision
Managerial Finance, 2019Co-Authors: Matt Hill, Lorenzo A. Preve, Katerina E. Hill, Virginia Sarria-allendeAbstract:The purpose of this paper is to examine whether the level of financial Credit available in a country influences the level of Trade Credit provided to customers.,The authors examine the association between the supply of Trade Credit and the availability of country-level private financial Credit using multivariate regression models that account for country-level heterogeneity, macroeconomic conditions and firm-specific characteristics. The data set is a pooled sample of publicly Traded firms incorporated in 66 countries.,Supporting the re-distributional view of Trade Credit, robust results suggest that suppliers incorporated in countries with increased access to financial Credit provide increased Trade Credit to their customers. Further results indicate significant differences in Trade Credit usage across geographical regions. Consistent with existing research using samples of US firms, the use of Trade Credit is correlated with firm-level measures of financial constraints and product market dynamics.,The authors provide one of the first studies to examine differences in Trade Credit extension across a large number of countries.
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Trade Credit And Bank Credit : Evidence From Recent Financial Crises - Trade Credit and bank Credit: Evidence from recent financial crises
Journal of Financial Economics, 2007Co-Authors: Inessa Love, Lorenzo A. Preve, Virginia Sarria-allendeAbstract:Abstract This paper studies the effect of financial crises on Trade Credit for a sample of 890 firms in six emerging economies. Although the provision of Trade Credit increases right after a crisis, it contracts in the following months and years. Firms that are financially more vulnerable to crises extend less Trade Credit to their customers. We argue that the decline in aggregate Trade Credit ratios is driven by the reduction in the supply of Trade Credit that follows a bank Credit crunch, consistent with the “redistribution view” of Trade Credit provision, whereby bank Credit is redistributed via Trade Credit from financially stronger firms to weaker firms.
Lorenzo A. Preve - One of the best experts on this subject based on the ideXlab platform.
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International evidence on the determinants of Trade Credit provision
Managerial Finance, 2019Co-Authors: Matt Hill, Lorenzo A. Preve, Katerina E. Hill, Virginia Sarria-allendeAbstract:The purpose of this paper is to examine whether the level of financial Credit available in a country influences the level of Trade Credit provided to customers.,The authors examine the association between the supply of Trade Credit and the availability of country-level private financial Credit using multivariate regression models that account for country-level heterogeneity, macroeconomic conditions and firm-specific characteristics. The data set is a pooled sample of publicly Traded firms incorporated in 66 countries.,Supporting the re-distributional view of Trade Credit, robust results suggest that suppliers incorporated in countries with increased access to financial Credit provide increased Trade Credit to their customers. Further results indicate significant differences in Trade Credit usage across geographical regions. Consistent with existing research using samples of US firms, the use of Trade Credit is correlated with firm-level measures of financial constraints and product market dynamics.,The authors provide one of the first studies to examine differences in Trade Credit extension across a large number of countries.
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Trade Credit And Bank Credit : Evidence From Recent Financial Crises - Trade Credit and bank Credit: Evidence from recent financial crises
Journal of Financial Economics, 2007Co-Authors: Inessa Love, Lorenzo A. Preve, Virginia Sarria-allendeAbstract:Abstract This paper studies the effect of financial crises on Trade Credit for a sample of 890 firms in six emerging economies. Although the provision of Trade Credit increases right after a crisis, it contracts in the following months and years. Firms that are financially more vulnerable to crises extend less Trade Credit to their customers. We argue that the decline in aggregate Trade Credit ratios is driven by the reduction in the supply of Trade Credit that follows a bank Credit crunch, consistent with the “redistribution view” of Trade Credit provision, whereby bank Credit is redistributed via Trade Credit from financially stronger firms to weaker firms.
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Trade Credit and bank Credit evidence from recent financial crises
Journal of Financial Economics, 2005Co-Authors: Inessa Love, Lorenzo A. Preve, Virginia SarriaallendeAbstract:Abstract This paper studies the effect of financial crises on Trade Credit for a sample of 890 firms in six emerging economies. Although the provision of Trade Credit increases right after a crisis, it contracts in the following months and years. Firms that are financially more vulnerable to crises extend less Trade Credit to their customers. We argue that the decline in aggregate Trade Credit ratios is driven by the reduction in the supply of Trade Credit that follows a bank Credit crunch, consistent with the “redistribution view” of Trade Credit provision, whereby bank Credit is redistributed via Trade Credit from financially stronger firms to weaker firms.
Byong-duk Rhee - One of the best experts on this subject based on the ideXlab platform.
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Trade Credit for supply chain coordination
European Journal of Operational Research, 2011Co-Authors: Chang Hwan Lee, Byong-duk RheeAbstract:Abstract Trade-Credit is a seller’s short-term loan to the buyer, allowing the buyer to delay payment of an invoice. It has been the largest source of working capital for a majority of business-to-business firms in the United States. Numerous theories have been proposed to explain Trade-Credit, mainly from finance perspectives. It has also been an important issue in supply chain management. Surprisingly, most literature in supply chain management has examined the retailer’s stocking policies given a supplier’s Trade-Credit. This paper attempts to shed light on Trade-Credit from a supplier’s perspective, and presents it as a tool for supply chain coordination. Specifically, we explicitly assume firms’ financial needs for inventory. Following a Newsvendor framework, we assume that the supplier grants Trade-Credit and markdown allowance. Given the supplier’s offer, the retailer determines order quantity and the financing option for the inventory, either Trade-Credit or direct financing from a financial institution. Our result shows that the supplier’s markdown allowance alone cannot fully coordinate the supply chain if the retailer employs direct financing. Positive financing costs call for Trade-Credit in order to subsidize the retailer’s costs of inventory financing. Using Trade-Credit in addition to markdown allowance, the supplier fully coordinates the retailer’s decisions for the largest joint profit, and extracts a greater portion of the maximized joint profit.
Daniela Fabbri - One of the best experts on this subject based on the ideXlab platform.
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Bargaining power and Trade Credit
Journal of Corporate Finance, 2016Co-Authors: Daniela Fabbri, Leora KlapperAbstract:This paper investigates how the supplier's bargaining power affects Trade Credit supply. We use a novel firm-level database of Chinese firms with unique information on the amount, terms, and payment history of Trade Credit extended to customers and detailed information on product market structure and clients-supplier relationships. We document that suppliers with weak bargaining power towards their customers are more likely to extend Trade Credit, have a larger share of goods sold on Credit, and offer a longer payment period before imposing penalties. Important customers extend the payment period beyond what has been offered by their supplier and generate overdue payments. Furthermore, weak bargaining power suppliers are less likely to offer Trade Credit when Credit-constrained by banks. Our findings suggest that suppliers use Trade Credit as a competitive device in the product market.
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Trade Credit, collateral liquidation, and borrowing constraints
Journal of Financial Economics, 2010Co-Authors: Daniela Fabbri, Anna Maria Cristina MenichiniAbstract:Assuming that firms’ suppliers are better able to extract value from the liquidation of assets in default and have an information advantage over other Creditors, the paper derives six predictions on the use of Trade Credit. (1) Financially unconstrained firms (with unused bank Credit lines) take Trade Credit to exploit the supplier's liquidation advantage. (2) If inputs purchased on account are sufficiently liquid, the reliance on Trade Credit does not depend on Credit rationing. (3) Firms buying goods make more purchases on account than those buying services, while suppliers of services offer more Trade Credit than those of standardized goods. (4) Suppliers lend inputs to their customers but not cash. (5) Greater reliance on Trade Credit is associated with more intensive use of tangible inputs. (6) Better Creditor protection decreases both the use of Trade Credit and input tangibility.
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Trade Credit collateral liquidation and borrowing constraints
2009Co-Authors: Daniela Fabbri, Anna Maria Cristina MenichiniAbstract:The paper proposes a model of collateralized bank and Trade Credit. Firms use a two-input technology. Assuming that the supplier is better able to extract value from existing assets and has an information advantage over other Creditors, the paper derives a series of predictions. (1) Financially unconstrained firms (with unused bank Credit lines) take Trade Credit for a liquidation motive. (2) The reliance on Trade Credit does not depend on Credit rationing, if inputs are liquid enough. (3) Firms buying goods make more purchases on account than those buying services, while suppliers of services offer more Trade Credit than those of standardized goods. (4) Suppliers lend inputs to their customers but not cash. (5) Greater reliance on Trade Credit is associated with more intensive use of tangible inputs. (6) Better Creditor protection decreases both the use of Trade Credit and input tangibility.
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Trade Credit and the Supply Chain
2009Co-Authors: Daniela Fabbri, Leora KlapperAbstract:This paper studies supply chain financing. We investigate why a firm extends Trade Credit to its customers and how this decision relates to its own financing. We use a novel firm-level database with unique information on market power in both output and input markets and on the amount, terms, and payment history of Trade Credit simultaneously extended to customers (accounts receivable) and received from suppliers (accounts payable). We find that suppliers with relatively weaker market power are more likely to extend Trade Credit and have a larger share of goods sold on Credit. We also examine the importance of financial constraints. Access to bank financing and profitability are not significantly related to Trade Credit supply. Rather, firms that receive Trade Credit from their own suppliers are more likely to extend Trade Credit to their customers, and to "match maturity" between the contract terms of payables and receivables. This matching practice is more likely used when firms face strong competition in the product market (relative to their customers), and enjoy strong market power in the input market (relative to their suppliers). Similarly, firms lacking internal resources and without access to bank Credit, and firms that use more costly informal sources of financing, are more dependent on the receipt of supplier financing in order to extend Credit to their customers.
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Market Power And The Matching Of Trade Credit Terms - Market power and the matching of Trade Credit terms
Policy Research Working Papers, 2008Co-Authors: Daniela Fabbri, Leora KlapperAbstract:This paper studies the decision of firms to extend Trade Credit to customers and its relation with their financing decisions. The authors use a novel firm-level database of Chinese SMEs with unique information on market power in both output and input markets and on the amount, terms, and payment history of Trade Credit simultaneously extended to customers (accounts receivable) and received from suppliers (accounts payable). The analysis shows that suppliers with relatively weaker market power are more likely to extend Trade Credit and have a larger share of goods sold on Credit. Examination of the importance of financial constraints reveals that access to bank financing and profitability are not significantly related to Trade Credit supply. Rather, firms that receive Trade Credit from their own suppliers are more likely to extend Trade Credit to their customers, and to "match maturity" between the contract terms of payables and receivables. This matching practice is more likely used when firms face strong competition in the product market (relative to their customers), and enjoy strong market power in the input market (relative to their suppliers). These results highlight the importance of supply chain financing for market competition and risk management in Credit constrained firms.
