We examine the operating performance improvements associated with the extension of trade credit. Our results suggest a positive and significant relation between future profitability and contemporaneous trade credit provision. Further findings indicate significantly higher margins, revenues and...

This study explores the role of trade credit using a unique sample of long-term supply contracts collected from SEC filings. The contracts provide rich detail of the variation in the types and amounts of credit, as well as buyer and supplier characteristics and other product market variables. I...