. Although firms report bank corruption, there is no evidence that it significantly affects the allocation of credit or the … performance of firms that receive the credit. The findings suggest that the role of reputation and relationship based financing …

with relatively high demand have higher raw-material inventory and use more trade credit. There is little evidence that the … amount of credit usage per unit of raw-material inventory changes with firms' demand shocks. These outcomes are consistent … with theories of trade credit that stress the use of trade credit in financing inputs rather than providing efficient …

The provision of trade credit has been explained both by theories that focus on its role in contracting for … 2007-2009 financial crisis and recession as a natural experiment to test trade credit theories. High-demand firms become …-material inventories, consistent with the transactions-based theories. Thus, trade credit is unlikely to be effective in financing the …