Trade Credit and the Effect of Macro-Financial Shocks: Evidence From U.S. Panel Data

2003 ◽  
Vol 03 (127) ◽  
pp. 1 ◽  
Author(s):  
Yungsan Kim ◽  
Woon Gyu Choi ◽  
◽  
Keyword(s):  
Panel Data ◽  
Trade Credit ◽  
Financial Shocks

Trade Credit and the Effect of Macro-Financial Shocks: Evidence from U.S. Panel Data

2005 ◽  
Vol 40 (4) ◽  
pp. 897-925 ◽  
Author(s):  
Woon Gyu Choi ◽  
Yungsan Kim
Keyword(s):  
Monetary Policy ◽  
Panel Data ◽  
Trade Credit ◽  
Comparison Group ◽  
Large Firms ◽  
Financial Shocks ◽  
Accounts Receivable ◽  
Accounts Payable

AbstractUsing disaggregated panel data, we examine how firms change trade credit in response to a monetary tightening. We find that both accounts payable and accounts receivable increase with tighter monetary policy, implying that trade credit helps firms absorb the effect of a credit contraction. Further, both S&P 500 firms and a comparison group of smaller firms increase net trade credit (accounts receivable minus payable), making up for the reduced liquidity associated with tighter policy. However, we find no evidence that large firms play this role more actively than smaller firms.

scholarly journals Can Trade Credit Maintain Sustainable R&D Investment of SMEs? — Evidence from China

2019 ◽  
Vol 11 (3) ◽  
pp. 843 ◽  
Author(s):  
Langzi Chen ◽  
Zhihong Chen ◽  
Jian Li
Keyword(s):  
Developing Countries ◽  
Panel Data ◽  
Propensity Score ◽  
Information Asymmetry ◽  
Financial Constraints ◽  
Trade Credit ◽  
Small And Medium Enterprises ◽  
Medium Enterprises ◽  
D Investment

Due to the long-term nature and information asymmetry, SMEs (Small and Medium Enterprises) experience serious financial constraints that affect their R&D investments. This article examines the effect of trade credit maintaining sustainable R&D investment of SMEs under financial constraints. Using the panel data of Chinese SMEs from 2002–2014, it was found that although the R&D investments of SMEs are restricted by financial constraints, trade credit can maintain the sustainability of enterprises’ R&D investment. Private enterprises are more reliant on trade credit, which can be intensified during periods of monetary tightening. Considering the counterfactual framework and the endogenous problems, the empirical results were also robust when using propensity score matching. To summarize, this article develops a new explanation for maintaining sustainable R&D investment of SMEs under financial constraints in developing countries.

scholarly journals Effect of Trade Credit on Firms Growth: A Case Study of Pakistani Non-financial Firms

2019 ◽  
Vol 5 (2) ◽  
Author(s):  
Hafiz M. Adnan Hanif
Keyword(s):  
Panel Data ◽  
Firm Growth ◽  
Trade Credit ◽  
Panel Data Analysis ◽  
Method Of Moment ◽  
Listed Firms ◽  
Financial Firms ◽  
Generalized Method Of Moment ◽  
The Impact

This study attempts to investigate the impact of trade credit on the growth of non-financial firms of Pakistan. Most of the businesses move from traditional business transactions to automated and sophisticated credit transaction methods. As large firms have better access to financial institutions and markets but still, they are interested to seek firm growth by adopting the trade credit policies. This study collects information from non-financial firms of Pakistan. Panel data is used to explore the impact of trade credit on firms growth. The data collect from the year 2001- 2015 of 257 non-financial firms of Pakistan. A technique of panel data analysis, generalized method of moment used to analyze the data. The results suggest that the trade credit and GDP have a positive significant impact on firms’ growth. Moreover, Firm’s age, its size and inflation in the economy have also impacted the firm’s growth but in negative direction. Finally, the non-financial listed firms of Pakistan can achieve their growth targets by adopting trade credit policies

scholarly journals Determinants of Cross-border Trade Credit in India: Evidence from Bank-level Panel Data

2020 ◽  
Vol 7 (2) ◽  
pp. 91
Author(s):  
Rajeev Jain ◽  
Dhirendra Gajbhiye ◽  
Soumasree Tewari
Keyword(s):  
Panel Data ◽  
Trade Credit ◽  
Cross Border ◽  
Border Trade

scholarly journals DETERMINANTS OF TRADE CREDIT IN EUROPEAN CONSTRUCTION FIRMS: A PRELIMINARY STUDY

Ekonomika ◽  
2016 ◽  
Vol 95 (2) ◽  
pp. 139-157 ◽  
Author(s):  
Nicoleta Barbua-Misu ◽  
Fitim Deari
Keyword(s):  
Panel Data ◽  
Negative Correlation ◽  
Trade Credit ◽  
Eastern European ◽  
Construction Sector ◽  
Construction Firms ◽  
Quantitative Analyses ◽  
Preliminary Study ◽  
Eastern European Countries ◽  
Medium Firms

The aim of this paper is to present a comparative study of trade credit indicators and the possible determinants of trade credit for firms acting in the construction sector, using a sample of 958 medium and large firms for the period 2004-2013. The objective of the study is to identify and examine selected variables that may determine trade credit used and provided by selected firms. The sample is derived from the Amadeus database. The examined firms were ones that have sold and bought on credit. The data was organised as panel-data and quantitative analyses were performed. This study demonstrates results that firms with higher trade receivables are less profitable; a positive correlation was found between trade receivables and liquidity, whereas a negative correlation was detected between trade receivables and gearing; larger firms provide and obtain more trade credit than medium firms; more profitable firms use less gearing; firms with higher profit margin are more liquid and more liquid firms use less gearing; based on an average and overall terms, there is not such a clear distinction between Western and Eastern European countries from viewpoint of net trade credit and net trade period.

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