Boissay, Frederic; Gropp, Reint - In: Review of Finance 17 (2013) 6, pp. 1853-1894
Using a unique data set on French firms, we show that credit constrained firms that face liquidity shocks are more likely to default on their payments to suppliers. Credit constrained firms pass on a sizeable fraction of such shocks to their suppliers. This is consistent with the idea that firms...