Trade Credit and the Effect of Macro-Financial Shocks: Evidence from U.S. Panel Data

WPIEA1272003 Image
Price:  $15.00

Author/Editor: Yungsan Kim, Woon Gyu Choi
Release Date: © June, 2003
ISBN : 978-1-45185-500-5
Stock #: WPIEA1272003
Stock Status: On back-order

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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.


Economic policy , Financial crisis , International financial system , Monetary policy

More publications in this series: Working Papers

More publications by: Yungsan Kim ; Woon Gyu Choi