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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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Multi-system governance within the EU rural development policy: a proposal for LAGs self-evaluation in the LEADER program
TL;DR: In this paper, the authors explore the role of the "multi-level governance" concept in the current EU rural development policies and in the proposal for the programming period 2014-2020 and set out a methodology for the self-evaluation of local governance with reference to the implementation of Local Action Programs (LEADER approach).
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Trade credit, group affiliation, and credit contraction: Evidence from the 1997 Korean financial crisis
TL;DR: In this article, the authors investigated the trade credit behaviors of Korean firms affiliated with business groups during the 1997 Korean financial crisis and found evidence that group-affiliated firms with high liquidity increase trade credit provision only to their affiliates, while they decrease financial assistance to unaffiliated client firms.
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Managerial incentives and accounts receivable management policy
Haibo Yao,Yiling Deng +1 more
TL;DR: In this article, the authors employ sorting, and various regression methods and adjust the Faulkender and Wang (2006) model to test two hypotheses, and find a negative relation between managerial risk-taking incentives (vega) and accounts receivable.
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Supply chain shared risk self-financing for incremental sales
TL;DR: In this paper, the authors proposed a new financing framework in which key supply chain stakeholders accept delayed payment for a pre-agreed portion of their product or service, and distribute these payments among the value chain stakeholders according to an agreed-upon policy.
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Research at the Interface of Finance, Operations, and Risk Management (iFORM): Recent Contributions and Future Directions
Volodymyr Babich,Panos Kouvelis +1 more
TL;DR: The interface of finance, operations and risk management (iFORM) is a relatively new research area dealing with timely, complex and boundary-spanning issues in a variety of settings from start-ups to global enterprises as discussed by the authors.
References
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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.