Inventory composition and trade credit

Mateut, Simona; Mizen, Paul; Ziane, Ydriss

Abstract

This empirical paper uses a panel of about half a million observations for French firms across economic sectors to investigate how the type of inventories can affect firms' incentives to use trade credit. We find evidence that trade credit extended is influenced by the extent to which firms hold different types of inventories. Moreover, we show that the strength of the relationship varies across economic sectors. Finally, we find that as buyers process goods, the sellers' incentives to extend trade credit diminish.

Citation

Mateut, S., Mizen, P., & Ziane, Y. (2015). Inventory composition and trade credit. International Review of Financial Analysis, 42, 434-446. doi:10.1016/j.irfa.2015.09.008

• Journal Article Type: Article
• Acceptance Date: Sep 11, 2015
• Online Publication Date: Sep 25, 2015
• Publication Date: Dec 22, 2015
• Deposit Date: Jul 4, 2018
• Print ISSN: 1057-5219
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 42
• Pages: 434-446
• DOI: https://doi.org/10.1016/j.irfa.2015.09.008
• Public URL: https://nottingham-repository.worktribe.com/output/1105815
• Publisher URL: https://www.sciencedirect.com/science/article/pii/S1057521915001556?via%3Dihub