Title

Trade Credit or Financial Credit? An International Study of the Choice and Its Influences

Document Type

Article

Publication Date

8-31-2017

Department

Finance, Real Estate, and Business Law

Abstract

Trade credit financing has usually been assumed to be an expensive source of funds. Recent studies, however, suggested that it can be available at either low or no cost. Using an international panel of firms, we provide an empirical answer to this matter. We analyze the type of firms and financial environments that are associated with a relatively more intense use of financial credit and, consistent with the mainstream literature, we find that trade credit financing is chosen by firms that have more restricted access to financial credit. These results appear to be stronger for firms located in emerging markets.

Publication Title

Emerging Markets Finance and Trade

Volume

53

Issue

10

First Page

2318

Last Page

2332

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