When bank credit supply declines, large customers may turn to their small suppliers for trade credit. This demand channel of trade credit flow and its real consequences are under-explored. Using a unique transaction-level dataset of bank-accepted commercial bills (as trade-credit payment...

Unlike the efficient redistribution theory, which holds that firms with high credit levels, high liquidity and high market position are lenders among firms, we find that they may also be borrowers. We empirically tested the different effects of value enhancement, coordination and stability when...