sellers charge markups over production costs and financial intermediation is costly, then buyer-seller pairs can save on their … overall financing costs by utilizing trade credit. We derive a model of trade credit and markups that captures this mechanism … this effect is stronger for complex products. Using Chilean data at the firm-level to estimate markups and at the trade …

credit use. First, firms with higher markups supply more trade credit. Second, trade credit use increases in relationship … rationalized in a model where firms learn about their trading partners, sellers charge markups over production costs, and financial …

credit use. First, firms with higher markups supply more trade credit. Second, trade credit use increases in relationship … rationalized in a model where firms learn about their trading partners, sellers charge markups over production costs, and financial …

to raise firm-level markups. …