This study shows that spin-offs acquire liquidity from their parent firms through the trade credit channel. We compare the trade credit of spin-offs with that of independent start-ups. Our findings reveal that spin-offs increase accounts payable when their parent firms are major suppliers....

We examine the heterogeneous propagation of the liquidity shortage through the supply-chain network. We find an increase of accounts receivable of a firm when its customer has strong bargaining power and financial vulnerability. Using a relation-level fixed-effects model, we find that the...