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
Market entrance and pricing strategies for a capital-constrained remanufacturing supply chain: effects of equity and bank financing on circular economy
TL;DR: In this article, the authors examined market entrance and pricing strategies for a remanufacturer with capital constraint and competition from an original equipment manufacturer (OEM) in the context of a ReMiner.
Journal ArticleDOI
Online or Not? What Factors Affect Equity Crowdfunding Platforms to Launch Projects Online in the Pre-Investment Stage?
TL;DR: In this article, the authors draw on signal theory and the research findings of local bias in VC to examine how geographic distance (GD) and different signals affect equity crowdfunding platforms launching projects online.
ReportDOI
Can Paying Firms Quicker Affect Aggregate Employment
TL;DR: The authors studied the impact of the federal government's accelerated payments to small business contractors on county-sector employment growth over the subsequent three years, finding that despite firms being paid just 15 days sooner, payroll increased 10 cents for each accelerated dollar, with two-thirds of the effect coming from an increase in new hires and the balance from a increase in earnings.
Journal ArticleDOI
Ownership discrimination and private firms financing in China
Min Bai,Jifu Cai,Yafeng Qin +2 more
TL;DR: In this paper, the authors examined the financing/funding of private firms in China and found that private firms are significantly less funded through formal financing channels such as bank loans than state-owned firms, and hence have to resort to alternative financing such as trade credit.
Journal ArticleDOI
Pilot CEOs and trade credit
Hongkang Xu,Duong Nguyen,Mai Dao +2 more
TL;DR: The authors examined the relation between sensation-seeking CEOs and trade credit by using a pilot license as a proxy for the sensationseeking personality trait, using a sample of pilot CEOs and non-pilot C...
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.