"This paper studies the decision of firms to extend trade credit to customers and its relation with their financing decisions. The authors use a novel firm-level database of Chinese SMEs with unique information on market power in both output and input markets and on the amount, terms, and...

This paper studies the decision of firms to extend trade credit to customers and its relation with their financing decisions. The authors use a novel firm-level database of Chinese SMEs with unique information on market power in both output and input markets and on the amount, terms, and payment...

The paper investigates the determinants of trade credit demand and its interactions with the input combination of the firm, within an incomplete contract setting with uncertainty, two-input technology and collateralised credit contracts. Assuming that the supplier is better able to extract value...