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In-kind finance: a theory of trade credit
Mike Burkart,Tore Ellingsen +1 more
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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
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Bank Credit, Trade Credit, and Profit: Evidence from Agricultural Firms in Vietnam
TL;DR: In this paper, the authors investigated the relationship between bank credit and trade credit with profit of 130 agricultural firms listed on Vietnam stock exchanges in the period of 2008-2014 using the GMM approach.
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Asset Diversion, Input Allocation and Capital Structure 1
TL;DR: In this article, the determinants of bank and trade credit demands and their interactions with the input combination optimally chosen by the entrepreneur, within an incomplete contract setting with uncertainty, two-input technology and collateralized credit contracts are investigated.
Journal ArticleDOI
Does skilled labor risk matter to suppliers? Evidence from trade credit
Joye Khoo,Adrian Cheung +1 more
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Управление дебиторской задолженностью в оптовой торговой компании с использованием методов статистического анализа
TL;DR: In this article, the application of statistical methods for the trade credit management in the wholesale Russian companies is presented, where binomial logistic model and discriminant analysis are used to assess the customers' reliability, his inclination to violate the terms specified in the contract.
Journal ArticleDOI
Crédito de proveedores, tamaño de empresa e informalidad
TL;DR: The importance of the credito comercial de proveedores in Mexico is much higher than el desproporcionado peso de a bancaria, as shown in this paper.
References
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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.