Trade Credit And Bank Credit

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Trade Credit and Bank Credit

Author : Inessa Love
Publisher : World Bank Publications
ISBN 13 :
Total Pages : 34 pages
Book Rating : 4./5 ( download)

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Book Synopsis Trade Credit and Bank Credit by : Inessa Love

Download or read book Trade Credit and Bank Credit written by Inessa Love and published by World Bank Publications. This book was released on 2005 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: "The authors study the effect of financial crises on trade credit in a sample of 890 firms in six emerging economies. They find that although provision of trade credit increases right after the crisis, it consequently collapses in the following months and years. The authors observe that firms with weaker financial position (for example, high pre-crisis level of short-term debt and low cash stocks and cash flows) are more likely to reduce trade credit provided to their customers. This suggests that the decline in aggregate credit provision is driven by the reduction in the supply of trade credit, which follows the bank credit crunch. The results are consistent with the "redistribution view" of trade credit provision, in which bank credit is redistributed by way of trade credit by the firms with stronger financial position to the firms with weaker financial stand "--World Bank web site.

Does Trade Credit Substitute Bank Credit? Evidence From Firm-Level Data

Author : Mr.Guido De Blasio
Publisher : International Monetary Fund
ISBN 13 : 1451858124
Total Pages : 29 pages
Book Rating : 4.4/5 (518 download)

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Book Synopsis Does Trade Credit Substitute Bank Credit? Evidence From Firm-Level Data by : Mr.Guido De Blasio

Download or read book Does Trade Credit Substitute Bank Credit? Evidence From Firm-Level Data written by Mr.Guido De Blasio and published by International Monetary Fund. This book was released on 2003-08-01 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper examines micro data on Italian manufacturing firms' inventory behavior to test the Meltzer (1960) hypothesis according to which firms substitute trade credit for bank credit during periods of monetary tightening. It finds that their inventory investment is constrained by the availability of trade credit. As for the magnitude of the substitution effect, however, this study finds that it is not sizable. This is in line with the micro theories of trade credit and the evidence on actual firm practices, according to which credit terms display modest variations over time.

Trade Credit and Bank Credit

Author : Inessa Love
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (931 download)

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Book Synopsis Trade Credit and Bank Credit by : Inessa Love

Download or read book Trade Credit and Bank Credit written by Inessa Love and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The authors study the effect of financial crises on trade credit in a sample of 890 firms in six emerging economies. They find that although provision of trade credit increases right after the crisis, it consequently collapses in the following months and years. The authors observe that firms with weaker financial position (for example, high pre-crisis level of short-term debt and low cash stocks and cash flows) are more likely to reduce trade credit provided to their customers. This suggests that the decline in aggregate credit provision is driven by the reduction in the supply of trade credit, which follows the bank credit crunch. The results are consistent with the "redistribution view" of trade credit provision, in which bank credit is redistributed by way of trade credit by the firms with stronger financial position to the firms with weaker financial stand.

Formal Finance and Trade Credit During China's Transition

Author : Robert J. Cull
Publisher : World Bank Publications
ISBN 13 :
Total Pages : 36 pages
Book Rating : 4./5 ( download)

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Book Synopsis Formal Finance and Trade Credit During China's Transition by : Robert J. Cull

Download or read book Formal Finance and Trade Credit During China's Transition written by Robert J. Cull and published by World Bank Publications. This book was released on 2007 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a large panel dataset of Chinese industrial firms, the authors examine the determinants of access to loans from formal financial intermediaries and extension of trade credit. Poorly performing state-owned enterprises were more likely to redistribute credit to firms with less privileged access to loans through trade credit, a pattern consistent with some of the extension of trade credit being involuntary. By contrast, profitable private domestic firms were more likely to extend trade credit than unprofitable ones. Trade credit likely provided a substitute for loans for these private firms' customers that were shut out of formal credit markets. As biases in lending became less severe, the amount of trade credit extended by private firms declined.

Trade Credit and Financing Instruments

Author : Lucia Gibilaro
Publisher : Business Expert Press
ISBN 13 : 1948976021
Total Pages : 136 pages
Book Rating : 4.9/5 (489 download)

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Book Synopsis Trade Credit and Financing Instruments by : Lucia Gibilaro

Download or read book Trade Credit and Financing Instruments written by Lucia Gibilaro and published by Business Expert Press. This book was released on 2018-12-18 with total page 136 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book offers managers a complete analysis of the various facets of commercial credit and presents an analysis of the various types of markets, instruments, and risks associated with trade credit in supply chains across the globe. Trade credit is extensively used in both domestic and international commercial transactions. Although it clearly supports growth, its significance is even greater for developed countries, where the market has recovered remarkably since the global financial crisis. The number and heterogeneity of motivations to trade credit justify the variability observed in the data on global trading, and the role of trade credit has become crucial in supply chain coordination. A range of diverse trade credit finance solutions are available and include products and services offered by financial intermediaries and market products, highlighting a very interesting set of intermediate solutions that have emerged as a result of new technologies utilized in financial services. For financiers trade credit is an attractive option, but an in-depth evaluation of the possibility of losses forms the basis of a deep understating of numerous sources that can create credit risk (default and dilution risk). This book offers managers a complete analysis of the various facets of commercial credit and presents an analysis of the various types of markets, instruments, and risks associated with trade credit in supply chains across the globe.

credit chains and sectoral comovement: does the use of trade credit amplify sectoral shocks?

Author : Claudio Raddatz
Publisher : World Bank Publications
ISBN 13 :
Total Pages : 53 pages
Book Rating : 4./5 ( download)

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Book Synopsis credit chains and sectoral comovement: does the use of trade credit amplify sectoral shocks? by : Claudio Raddatz

Download or read book credit chains and sectoral comovement: does the use of trade credit amplify sectoral shocks? written by Claudio Raddatz and published by World Bank Publications. This book was released on 2012 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides evidence of the presence and relevance of a credit-chain amplification mechanism by looking at its implications for the correlation of industries. In particular, it tests the hypothesis that an increase in the use of trade-credit along the input-output chain linking two industries results in an increase in their correlation. The analysis uses detailed data on the correlations and input-output relations of 378 manufacturing industry-pairs across 44 countries with different degrees of use of trade credit. The results provide strong support for this hypothesis and indicate that the mechanism is quantitatively relevant.

Does Trade Credit Substitute for Bank Credit? Evidence from Firm-Level Data

Author : Guido de Blasio
Publisher :
ISBN 13 :
Total Pages : 28 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Does Trade Credit Substitute for Bank Credit? Evidence from Firm-Level Data by : Guido de Blasio

Download or read book Does Trade Credit Substitute for Bank Credit? Evidence from Firm-Level Data written by Guido de Blasio and published by . This book was released on 2006 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper examines micro data on Italian manufacturing firms` inventory behavior to test the Meltzer (1960) hypothesis according to which firms substitute trade credit for bank credit during periods of monetary tightening. It finds that their inventory investment is constrained by the availability of trade credit. As for the magnitude of the substitution effect, however, this study finds that it is not sizable. This is in line with the micro theories of trade credit and the evidence on actual firm practices, according to which credit terms display modest variations over time.

Does Trade Credit Substitute for Bank Credit?

Author : Guido De Blasio
Publisher :
ISBN 13 :
Total Pages : 56 pages
Book Rating : 4.X/5 (4 download)

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Book Synopsis Does Trade Credit Substitute for Bank Credit? by : Guido De Blasio

Download or read book Does Trade Credit Substitute for Bank Credit? written by Guido De Blasio and published by . This book was released on 2004 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Trade credit, financial intermediary development, and industry growth

Author : Raymond Fisman
Publisher : World Bank Publications
ISBN 13 :
Total Pages : 34 pages
Book Rating : 4./5 ( download)

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Book Synopsis Trade credit, financial intermediary development, and industry growth by : Raymond Fisman

Download or read book Trade credit, financial intermediary development, and industry growth written by Raymond Fisman and published by World Bank Publications. This book was released on 2001 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: Where do firms turn for financing in countries with poorly developed financial markets? One source is trade credit. And where formal financial intermediaries are deficient, industries that rely more on this source of financing grow faster.

The Encouragement of Trade Acceptances as a Form of Liquid Credit

Author : Beverly Dabney Harris
Publisher :
ISBN 13 :
Total Pages : 32 pages
Book Rating : 4.:/5 (89 download)

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Book Synopsis The Encouragement of Trade Acceptances as a Form of Liquid Credit by : Beverly Dabney Harris

Download or read book The Encouragement of Trade Acceptances as a Form of Liquid Credit written by Beverly Dabney Harris and published by . This book was released on 1916 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt:

The Roles of Bank and Trade Credits

Author : Gangshu (George) Cai
Publisher :
ISBN 13 :
Total Pages : 54 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis The Roles of Bank and Trade Credits by : Gangshu (George) Cai

Download or read book The Roles of Bank and Trade Credits written by Gangshu (George) Cai and published by . This book was released on 2017 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the roles of bank and trade credits in a supply chain with a capital constrained retailer facing demand uncertainty. The retailer can borrow credit from a bank (bank credit), and/or from the supplier who allows delayed payment (trade credit). We evaluate the retailer's optimal order quantity and the creditors' optimal credit limits and interest rates in two scenarios where either a single credit or both credits are viable. In the single-credit scenario, we find the retailer prefers trade credit, if the trade credit market is more competitive than the bank credit market; otherwise, the retailer's preference of a specific credit type depends on the risk levels that the retailer would divert trade credit and bank credit to other risky investment. In the dual-credit scenario, if the bank credit market is more competitive than the trade credit market, the retailer first borrows bank credit prior to trade credit, but then switches to borrowing trade credit prior to bank credit as the retailer's internal capital declines. In contrast, if the trade credit market is more competitive, the retailer borrows only trade credit. We further analytically prove that the two credits are complementary if the retailer's internal capital is substantially low but become substitutable as the internal capital grows, and then empirically validate this prediction based on a panel of 674 manufacturing firms in China over the period 2001-2007.

Trade Credit and Risk Management

Author : Lucia Gibilaro
Publisher : Business Expert Press
ISBN 13 : 1949443264
Total Pages : 162 pages
Book Rating : 4.9/5 (494 download)

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Book Synopsis Trade Credit and Risk Management by : Lucia Gibilaro

Download or read book Trade Credit and Risk Management written by Lucia Gibilaro and published by Business Expert Press. This book was released on 2018-12-18 with total page 162 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book offers managers a complete analysis of the various issues of credit risk management for trade credit financing instruments supported by applications to various types of markets and presents an analysis on risks associated with trade credit in supply chains. Trade credit finance is characterized by strong attractiveness deriving from risk mitigation, but the plurality of sources of credit risk (default and dilution risk) requires the implementation of a credit risk management system that exploits the broad knowledge developed by financing supply relationships. Consequently, financiers could be hindered from developing a full understanding of the underwritten risks and are thus unable or only partially able to evaluate their full potential to expand financial relationships over the credit capability of a single counterparty with respect to the supplier–debtor pair. The richness of the information available in trade credit financing is not an obstacle for the development of a modern risk management framework, but it must be calibrated to avoid distortions in the implementation. In addition, risk analysis in the supply chain is not limited to the crises of individual members but must assess the effects of such crisis on the entire supply chain and assess the specific risks of contagion and the favorable conditions for the propagation. This book offers managers a complete analysis of the various issues of credit risk management for trade credit financing instruments supported by applications to various types of markets and presents an analysis on risks associated with trade credit in supply chains.

Trade Credit and the Effect of Macro-Financial Shocks

Author : Mr.Yungsan Kim
Publisher : International Monetary Fund
ISBN 13 : 1451855001
Total Pages : 36 pages
Book Rating : 4.4/5 (518 download)

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Book Synopsis Trade Credit and the Effect of Macro-Financial Shocks by : Mr.Yungsan Kim

Download or read book Trade Credit and the Effect of Macro-Financial Shocks written by Mr.Yungsan Kim and published by International Monetary Fund. This book was released on 2003-06-01 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: Many studies examine why firms are financed by their suppliers, but few empirical studies look at the macroeconomic implications of such financial arrangements. Using disaggregated panel data, we examine how firms extend and use trade credit. We find that, controlling for the transactions or asset management motive, both accounts payable and receivable increase with tighter policy, implying that trade credit helps firms absorb the effect of a credit contraction. A comparison of S&P 500 firms with smaller firms, however, provides no evidence that when policy is tightened, large firms play the role of credit suppliers more actively than small firms.

Trade Finance

Author : Christopher Hare
Publisher : Oxford University Press
ISBN 13 : 0192596675
Total Pages : 384 pages
Book Rating : 4.1/5 (925 download)

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Book Synopsis Trade Finance by : Christopher Hare

Download or read book Trade Finance written by Christopher Hare and published by Oxford University Press. This book was released on 2021-07-01 with total page 384 pages. Available in PDF, EPUB and Kindle. Book excerpt: Trade Finance provides a much-needed re-examination of the relevant legal principles and a study of the challenges posed to current legal structures by technological changes, financial innovation, and international regulation. Arising out of the papers presented at the symposium, Trade Finance for the 21st Century, this collection brings together the perspectives of scholars and practitioners from around the globe focusing on core themes, such as reform and the future role of the UCP, the impact of technology on letters of credit and other forms of trade finance, and the rise of alternative forms of financing. The book covers three key fields of trade finance, starting with the challenges to traditional trade financing by means of documentary credit. These include issues related to contractual enforceability, the use of "soft clauses", the doctrine of strict compliance, the fraud exception, the role of the correspondent bank, performance bonds, and conflict of laws problems. The second main area covered by the work is the technological issues and opportunities in trade finance, including electronic bills of exchange, blockchain, and electronically transferable records. The final part of the work considers alternative and complementary trade finance mechanisms such as open account trading, supply-chain financing, the bank payment obligation, and countertrade.

Customer Market Power and the Provision of Trade Credit

Author : Neeltje van Horen
Publisher : World Bank Publications
ISBN 13 :
Total Pages : 27 pages
Book Rating : 4./5 ( download)

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Book Synopsis Customer Market Power and the Provision of Trade Credit by : Neeltje van Horen

Download or read book Customer Market Power and the Provision of Trade Credit written by Neeltje van Horen and published by World Bank Publications. This book was released on 2007 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: Statistics show that the sale of goods on credit is widespread among firms even when they are capital constrained and thus face relatively high costs in providing trade credit. This study provides an explanation for this by arguing that customers who possess strong market power are able to increase their customer surplus by demanding to purchase the goods on credit. This gain in customer surplus increases with the degree of asymmetric information between buyer and seller with respect to product quality. Therefore, firms that are perceived as risky are especially subject to the market power of the customer and have to sell their goods on credit. Using detailed firm-level data from a large number of firms in Eastern Europe and Central Asia, this study finds evidence consistent with this hypothesis. It finds a strong positive correlation between customer market power and trade credit provision. Furthermore, this relationship is especially strong when the supplier is more risky and in countries with limited financial sector development or a weak legal system.

Does Trade Credit Facilitate Access to Bank Finance? Empirical Evidence from Portuguese and Spanish Small Medium Size Enterprises

Author : Ana Paula Matias Gama
Publisher :
ISBN 13 :
Total Pages : 35 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Does Trade Credit Facilitate Access to Bank Finance? Empirical Evidence from Portuguese and Spanish Small Medium Size Enterprises by : Ana Paula Matias Gama

Download or read book Does Trade Credit Facilitate Access to Bank Finance? Empirical Evidence from Portuguese and Spanish Small Medium Size Enterprises written by Ana Paula Matias Gama and published by . This book was released on 2016 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines if trade credit is as a substitute and/or a complement to bank credit in order to assess the existence of credit rationing. Using a panel dataset of 468 and 7019 Portuguese and Spanish small medium size enterprises for the period 1998-2006, and controlling for endogeneity problems by using GMM estimators, the results confirm the existence of credit rationing, since the substitution hypothesis is confirmed. This effect is particularly strong for firms that maintaining an exclusive relationship with one bank, which indicate a greater severity of adverse selection problems for those firms. Although the substitution hypothesis is confirmed, the results also indicate that the substitution and complementary hypothesis are not mutually exclusive, especially for a specific group of firms: the younger and smaller firms. In line with the theories that emphasize the informational role of trade credit, due the informative advantage of suppliers, our empirical results confirm that trade credit allow the younger and smaller firms to improve their reputation, as trade credit reveals the private information of the supplier to the bank, in turn, banks can update their beliefs about customer default risk and agree to increase bank credit.

The Theory of Corporate Finance

Author : Jean Tirole
Publisher : Princeton University Press
ISBN 13 : 1400830222
Total Pages : 657 pages
Book Rating : 4.4/5 (8 download)

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Book Synopsis The Theory of Corporate Finance by : Jean Tirole

Download or read book The Theory of Corporate Finance written by Jean Tirole and published by Princeton University Press. This book was released on 2010-08-26 with total page 657 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Magnificent."—The Economist From the Nobel Prize–winning economist, a groundbreaking and comprehensive account of corporate finance Recent decades have seen great theoretical and empirical advances in the field of corporate finance. Whereas once the subject addressed mainly the financing of corporations—equity, debt, and valuation—today it also embraces crucial issues of governance, liquidity, risk management, relationships between banks and corporations, and the macroeconomic impact of corporations. However, this progress has left in its wake a jumbled array of concepts and models that students are often hard put to make sense of. Here, one of the world's leading economists offers a lucid, unified, and comprehensive introduction to modern corporate finance theory. Jean Tirole builds his landmark book around a single model, using an incentive or contract theory approach. Filling a major gap in the field, The Theory of Corporate Finance is an indispensable resource for graduate and advanced undergraduate students as well as researchers of corporate finance, industrial organization, political economy, development, and macroeconomics. Tirole conveys the organizing principles that structure the analysis of today's key management and public policy issues, such as the reform of corporate governance and auditing; the role of private equity, financial markets, and takeovers; the efficient determination of leverage, dividends, liquidity, and risk management; and the design of managerial incentive packages. He weaves empirical studies into the book's theoretical analysis. And he places the corporation in its broader environment, both microeconomic and macroeconomic, and examines the two-way interaction between the corporate environment and institutions. Setting a new milestone in the field, The Theory of Corporate Finance will be the authoritative text for years to come.