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Customer financing, bargaining power and trade credit uptake

Mateut, Simona; Chevapatrakul, Thanaset

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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

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