Trade credit in Europe: Financial constraint and substitution effect in crisis times |
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Authors: | Candida Bussoli Claudio Giannotti Francesca Marino Antonello Maruotti |
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Institution: | 1. Department of Management, Finance and Technology, University LUM Giuseppe Degennaro, Casamassima, Bari, Italy;2. Department of Law, Economics, Politics and Modern languages, University LUMSA, Rome, Italy;3. Department of Law, Economics, Politics and Modern languages, University LUMSA, Rome, Italy
Department of Mathematics, University of Bergen, Bergen, Norway |
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Abstract: | This paper aims to prove whether financial rationing condition leads European enterprises to increase trade debt during the period 2008–2016 and whether companies offering deferred payments to customers obtain trade debt from suppliers. The work contributes to the existing literature by finding new empirical evidence on the substitution and matching hypotheses in times of crises, measuring the specific rationing conditions for businesses and distinguishing large, medium, small and micro-sized companies. The results revealed that, in times of crisis, medium, small and micro firms, highly likely to be constrained, employ trade credit more extensively, as those granting deferred payment terms. |
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Keywords: | accounts payable accounts receivable crisis financial rationing trade credit |
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