This paper investigates the role of trade credit in the transmissionof monetary policy. Most models of the transmission mechanism allowthe firm to access only financial markets or bank lending according tosome net worth criterion. In our model we introduce trade creditas an additional source of...

This paper investigates the role of trade credit in the transmission of monetary policy. Most models of the transmission mechanism allow the firm to access only financial markets or bank lending according to some net worth criterion. In our model we introduce trade credit as an dditional source...

This paper provides the first detailed empirical study on the use of prepayments by firms. Our results based on large panels of French firms support the Daripa and Nilsen (2011) production subsidy theory of prepayment, according to which customers prepay their suppliers when these would...

We use a panel of 9381 UK firms to study the links between firms’ global engagement status and their financial health. We estimate inventory investment equations augmented with a financial composition variable, and interpret the sensitivity of inventory investment to the latter as a measure of...

We investigate the empirical linkages between sales uncertainty and firms’ inventory investment behavior while controlling for firms’ financial strength. Using large panels of manufacturing firms from several European countries we find that higher sales uncertainty leads to larger stocks of...

Our paper focuses on testing the advantages in controlling the buyer and salvaging goods supplied where we have information on the nature of the transacted good and information on the inventory of buyers and sellers. We find transactions in specialized goods tend to be conducted more often using...