Trade Credit and the Effect of Macro-Financial Shocks: Evidence From U.S. Panel Data
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
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.
Series:
Working Paper No. 2003/127
Subject:
Asset and liability management Asset management Bank credit External debt Government asset management Labor Monetary policy Monetary tightening Money Public financial management (PFM) Trade credits Wages
English
Publication Date:
June 1, 2003
ISBN/ISSN:
9781451855005/1018-5941
Stock No:
WPIEA1272003
Pages:
34
Please address any questions about this title to publications@imf.org