The purpose of this paper is to assess whether the banking system, over and beyond its credit function, has a …, our regressions confidently support the hypothesis that banks contribute to economic development not only as credit … suppliers but also by facilitating transactions. Specifically, along with the ratio of private credit to GDP, the ratio of …

SME investment opportunities depend on the level of financing constraints that firms face. Earlier research has mainly … firms but not for constrained firms, and trade credit predicts investment, but only for constrained firms. We also find that … unconstrained firms use bank loans to finance trade credit provided to other firms. Our results illustrate alternative mechanisms …

firms accelerate, loan growth. We find that small firms increase trade credit, a substitute credit, indicating a strong loan …-desirable alternative. Using trade credit is propitious since unlike commercial paper (investigated by previous researchers), it is widely … used by the small firms suffering the loan decline. Surprisingly, we also find large firms increase trade credit, a puzzle …

institutionalist approach to understand how banks construct and manage risk, relating to SME business. The empirical analysis is based …

The paper investigates the determinants of trade credit and its interactions with borrowing constraints and the input … combination of the firm, within an incomplete contract setting in which firms use a two-input technology and collateralised credit … unused bank credit lines) take trade credit for a liquidation motive; (2) the reliance on trade credit does not depend on the …

It is commonly believed that borrowers cannot be anonymous in unsecured credit relations because anonymity heavily … reduces the scope for punishment and therefore makes credit unfeasible except for very special circumstances. However, we … demonstrate that credit is generally feasible even if borrowers are anonymous. In particular, we construct equilibria where …

Firms choose debt structure and competing banks choose monitoring intensity. Monitoring improves credit allocation, but … creates informational lock-in effects in bank-borrower relationships. In a competitive credit market, banks dissipate … unknown credit quality. Consequently, banks' lending strategies result in cross-subsidies from good to bad borrowers. We …