García Marín, Alvaro; Justel, Santiago; … - 2019
Trade credit is the most important form of short-term finance for U.S. firms. In 2017, non-financial firms had about $3 … trillion in trade credit outstanding equaling 20 percent of U.S. GDP. Why do sellers lend to their buyers in the presence of a … well-developed financial sector? This paper proposes an explanation for the puzzling dominance of trade credit: When …