Using a sample of firms matched with their suppliers, we study the use of trade credit as firms approach a default event. We show that, in the extensive margin, around one third of suppliers exit the relationship well ahead of default, but the rest continue the relationship. Relationships are...

Using a supplier–client matched sample, we study the effect of the 2007–2008 financial crisis on between-firm liquidity provision. Consistent with a causal effect of a negative shock to bank credit, we find that firms with high precrisis liquidity levels increased the trade credit extended...

(VF)Cette contribution traite du crédit interentreprises et des délais de paiement particulièrement longs pratiqués par les entreprises françaises.Sur la base d’un échantillon de firmes industrielles et commerciales de la région Lorraine, observées de 1998 à 2006, nous produisons des...

We examine PME trade credit use across industry sectors in France between 2001 and 2010. Our main results provide evidence that suppliers efficiently deal with informational problems. First, we notice that trade credit is more important in firms total funding in sectors where standard deviations...

This article proposes an agency model to explain the trade credit offer to clients. Our model is based on the existence of asymmetric information between sellers and buyers, which results in the appearance of two phenomena known as adverse selection and moral hazard. The former has already been...

Employing data from a unique firm survey, this article examines small and medium-sized enterprise (SME) financing in Japan during the global financial crisis. The major findings of the article are two-fold. First, in terms of credit availability, loans extended by main banks were the “first...

There are two fundamental puzzles about trade credit: why does it appear to be so expensive,and why do input suppliers engage in the business of lending money? This paper addresses and answers both questions analysing the interaction between the financial and the industrial aspects of the...

The industrial organization of developing countries is characterized by the pervasive use of subcontracting arrangements among small, financially constrained firms. This paper asks whether vertical integration relaxes those financial constraints. It shows that vertical integration trades off the...

The industrial organization of developing countries is characterized by: (i) pervasive use of subcontracting arrangements among small firms, (ii) "missing middle" in the firm size distribution, and (iii) financially constrained firms.  This paper studies an incomplete contract model in which...