The paper analyses the motives behind trade use credit in the Polish enterprise sector, based on the results of the 2016 NBP Annual Survey. It verifies the conclusions stemming from trade credit theories regarding both the main motives driving supply and demand for trade credit, as well as...

We study the relationship between net trade credit and firms' investment levels, focusing on financially distressed firms. First, we introduce a theoretical model to predict the role played by net trade credit as a coordination device differentiating firms by their degree of financial distress....

Informal finance plays an important role in transitional economies with weak legal institutions, like China. As a major informal finance instrument, trade credit relies on informal institutions and enforcement. We argue that religion enhances the ethical climate of business and predict that...

This paper examines the relationship between supplier financing and small and medium-sized firms' value as well as the variation in the marginal value of supplier financing that arises from differences in access to financial markets and internal financing. We employ a sample of Spanish SMEs from...

Using a sample of distressed firms with information about suppliers, we document an average fall in the use of trade credit as firms approach bank-ruptcy compared to a control sample of non-bankrupt firms. However, we uncover a large degree of heterogeneity across suppliers. Suppliers facing...

Since 1988, cash holding of UK listed companies increased from 10.6 to 16.4%. Focusing on the short-term view of cash holding and its substitutes, trade credit and short-term bank finance, the study develops a panel vector autoregression that accounts for firm-specific liquidity needs based on...

This paper investigates whether market power affects trade credit decisions. We explore several financial crises in Argentina, Brazil, Mexico and the US that work as exogenous shocks to the supply of short and long term financing for nonfinancial firms. We find that firms with high market power...

This paper examines how a borrower's growth affects trade credit decisions. An analysis of publicly traded firm data from nine developed economies indicates that trade credit increases with growth. In some cases, this increase is driven by conditions related to liquidity. Exploring the...

In most countries, suppliers of intermediate goods and services are also the main providers of short-term financing to firms. This paper studies the macroeconomic implications of these financial links. In our model, trade credit is the outcome of a long-term contract between firms linked in the...

This paper uses data from commercial banks and nonfinancial listed firms in Vietnam from 2007 to 2022 to address the effect of banking uncertainty on firms' trade credit. We find that trade credit increases with heightened uncertainty in the banking sector, which is more conspicuous in...