Customer financing, bargaining power and trade credit uptake

Mateut, Simona; Chevapatrakul, Thanaset

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 from external finance, financing reasons play the main role especially at the higher trade credit quantiles.

Citation

Mateut, S., & Chevapatrakul, T. (2018). Customer financing, bargaining power and trade credit uptake. International Review of Financial Analysis, 59, 147-162. https://doi.org/10.1016/j.irfa.2018.07.004

• Journal Article Type: Article
• Acceptance Date: Jul 3, 2018
• Online Publication Date: Jul 6, 2018
• Publication Date: Oct 31, 2018
• Deposit Date: Jul 4, 2018
• Publicly Available Date: Jan 7, 2020
• Journal: International Review of Financial Analysis
• Print ISSN: 1057-5219
• Electronic ISSN: 1057-5219
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 59
• Pages: 147-162
• DOI: https://doi.org/10.1016/j.irfa.2018.07.004
• Keywords: trade credit; bargaining power; panel quantile regression
• Public URL: http://eprints.nottingham.ac.uk/id/eprint/52751
• Publisher URL: https://www.sciencedirect.com/science/article/pii/S1057521918304241
• Copyright Statement: Copyright information regarding this work can be found at the following address: http://creativecommons.org/licenses/by-nc-nd/4.0