The Impact of Macroeconomic Uncertainty on Trade Credit for Non-Financial Firms

In this paper we hypothesize that greater macroeconomic uncertainty would cause firms to increasingly turn to their suppliers as a source of finance, making greater use of trade credit. We test this hypothesis using a panel of non-financial firms drawn from the annual COMPUSTAT database and show that an increase in macroeconomic uncertainty leads to a narrowing of the cross-sectional distribution of firms' trade credit-to-sales ratios.

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Year of publication:	2003-06-26
Authors:	Baum, Christopher ; Caglayan, Mustafa ; Ozkan, Neslihan
Institutions:	Department of Economics, Boston College
Subject:	trade credit \| financing \| liquidity constraints \| uncertainty

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Extent:	application/pdf
Series:	Boston College Working Papers in Economics.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series Boston College Working Papers in Economics Number 566 13 pages
Classification:	E32 - Business Fluctuations; Cycles ; G32 - Financing Policy; Capital and Ownership Structure
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10004968829