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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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Why is the Inter-firm Credit Market in Korea Special? An Agency View of Trade Credit Use by Chaebols
Daehwan Kim,Jeffrey H. Nilsen +1 more
TL;DR: In this paper, the authors study inter-firm credit (also known as trade credit) or the delayed payment a supplier allows its downstream customer on a product sale) with an emphasis on its unique features in Korea.
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The Days to Pay Accounts Payable Determinants Assets Structure and Short-Term Financing Flexibilities: A Panel Data GMM Estimation
Oliveira Marques,Justino Manuel +1 more
TL;DR: In this article, an innovative research to improve trade debt management conditions and to suggest replacing firm's fixed assets by assets structure flexibility, in a short-term financing flexibility environment is presented.
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Trade Credit Terms between the Firms in Bulgaria
TL;DR: In this paper, the authors presented the results of empirical sociological examination of trade credit terms in Bulgaria and investigated the determinants of these terms, and analyzed the trade credit price.
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Financial constraints, R&D investment and uncertainty: new evidence from the Italian automotive supply chain
TL;DR: In this article , the authors investigated the relation between investments in R&D and financial constraints, unpacking the expected uncertainties in the innovation process, and highlighting the most relevant factors that might prevent access to external financial resources.
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.