Centre for Finance, Credit and Macroeconomics (CFCM)
   
   
  

CFCM 17/04: Customer financing, bargaining power and trade credit uptake

Abstract

We investigate the impact of well-established trade credit theories on different parts of the distribution of trade credit taken by firms. Our results suggest that the trade credit - bank loans substitution increases at the higher trade credit quantiles and is stronger for larger firms (financing theory). Firms with high market shares operating in less concentrated industries have higher account payables to assets ratios (bargaining power theory). While the customer bargaining power motive strengthens up to the 70th quantile and prevails in industries independent on external finance, financing reasons play the main role especially at the higher trade credit quantiles.

This is a revised version of paper 16/04.

Download the PDF of this paper

Authors

Simona Mateut and Thanaset Chevapatrakul

 


View all CFCM discussion papers | View all School of Economics featured discussion papers

 

Posted on Thursday 13th July 2017

Centre for Finance, Credit and Macroeconomics

Sir Clive Granger Building
University of Nottingham
University Park
Nottingham, NG7 2RD

+44 (0)115 951 5620