Open AccessPosted Content
In-kind finance: a theory of trade credit
Mike Burkart,Tore Ellingsen +1 more
Reads0
Chats0
TLDR
In this paper, the authors argue that it is typically less profitable for an opportunistic borrower to divert inputs than to divert cash, and that suppliers may lend more liberally than banks.Abstract:
It is typically less profitable for an opportunistic borrower to divert inputs than to divert cash. Therefore, suppliers may lend more liberally than banks. This simple argument is at the core of our contract theoretic model of trade credit in competitive markets. The model implies that trade credit and bank credit can be either complements or substitutes. Among other things, the model explains why trade credit has short maturity, why trade credit is more prevalent in less developed credit markets, and why accounts payable of large unrated firms are more countercyclical than those of small firms.read more
Citations
More filters
Journal ArticleDOI
Bank Credits and Their Influence on Accounts Receivable: The Case of the Forestry Products Sector in Turkey
Ali Açikgöz,Celal Demirkol +1 more
TL;DR: In this paper, the authors examined the effect of bank credit on the level of accounts receivable in the forestry products sub-sector in Turkey and concluded that businesses of the sector should be sensitive primarily on their long-term bank credit.
Journal ArticleDOI
The Insurance Value of Trade Credit
Mario Eboli,Andrea Toto +1 more
TL;DR: In this article, the optimal amount of trade credit held by a firm that does not face a binding liquidity constraint but the risk of being constrained in the future is investigated, and it is shown that a positive probability of facing a liquidity constraint leads the firm to fund its inventories with trade credit, even if cheaper sources of funds are available.
Journal ArticleDOI
Trade credit and firm investments: empirical evidence from Italian cooperative banks
TL;DR: In this article , the influence of the trade credit channel on firm investment decisions in the Italian market was investigated by exploiting a unique and proprietary panel dataset comprising 6480 Italian SMEs having a relationship with 99 cooperative banks over the period 2008-2014.
Invoice Financing for Small and Medium-sized Enterprises on an Online Platform: An Action Design Research using a Transaction Cost Perspective on Platform Theories applied in a Start-up
TL;DR: In this article, the authors describe the design of a digital multi-sided platform that provides invoice financing to SMEs to overcome the information intensive transactions that it requires, by deriving design guidelines from transaction cost literature and concurrently "action designing" a live prototype.
Journal ArticleDOI
Determinants of access to trade credit for small and medium sized enterprises in turkey after the 2008 global crisis
TL;DR: In this article, the determinants of access to trade credit for SMEs operating in Turkey after the 2008 Global Crisis are discussed, and a theoretical framework on the concept of trade credit is given.
References
More filters
Journal ArticleDOI
Determinants of corporate borrowing
TL;DR: In this article, the authors predict that corporate borrowing is inversely related to the proportion of market value accounted for by real options and rationalize other aspects of corporate borrowing behavior, such as the practice of matching maturities of assets and debt liabilities.
Posted Content
What Do We Know About Capital Structure? Some Evidence from International Data
Raghuram G. Rajan,Raghuram G. Rajan,Raghuram G. Rajan,Luigi Zingales,Luigi Zingales,Luigi Zingales +5 more
TL;DR: In this paper, the authors investigate the determinants of capital structure choice by analyzing the financing decisions of public firms in the major industrialized countries and find that factors identified by previous studies as important in determining the cross-section of the capital structure in the U.S. affect firm leverage in other countries as well.
MonographDOI
Firms, contracts, and financial structure
TL;DR: In this article, a general model of the firm is developed, and then the financial structure of firms, debt collecting and bankruptcy is analyzed in greater depth, and the authors contribute to contact theory as developed in economic analysis.
Journal ArticleDOI
The Effect of Credit Market Competition on Lending Relationships
TL;DR: The authors showed that the extent of competition in credit markets is important in determining the value of lending relationships and that creditors are more likely to finance credit constrained firms when credit markets are concentrated because it is easier for these creditors to internalize the benefits of assisting the firms.
Journal ArticleDOI
A more complete conceptual framework for SME finance
TL;DR: In this article, the authors propose a more complete conceptual framework for analysis of SME credit availability issues, and emphasize a causal chain from policy to financial structures, which affect the feasibility and profitability of different lending technologies.