A new substantially revised version of this paper under the title of "Trade Credit, Risk Sharing, and Inventory Financing Portfolios" is available for download at: http://ssrn.com/abstract=2746645. As an integrated part of a supply contract, trade credit has intrinsic connections with supply...

The complexity and opacity of the network of interconnections among firms and their supply chains inhibits understanding of the impact of management decisions concerning the boundaries of the firm and the number and intensity of its relationships with suppliers and customers. Using recently...

Priority rules determine the order of repayment when the debtor cannot repay all of his debt. In this paper, we study how different priority rules influence trade credit usage and supply chain efficiency when multiple creditors are present. We find that with only demand risk, when the wholesale...

This paper examines how a firm's financial distress and the legal environment regarding the ease of bankruptcy reorganization can alter product market competition and supplier-buyer relationships. We identify three effects, predation, bail-out, and abetment, that can change firms' behavior from...

Using a panel of Credit Default Swap (CDS) spreads and supply chain links, we observe that both favorable and unfavorable credit shocks propagate through supply chains in the CDS market. Particularly, the three-day cumulative abnormal CDS spread change (CASC) is 63 basis points for firms whose...