We investigate how changes in the availability of bank credit influence how public firms manage their working capital, which is essential to their operations. In doing so, we provide an enhanced understanding of what significantly influences corporate working capital management. We find that...

We extend Tirole (2006) to link together two seemingly different cases – firms facing potential free cash flow problems versus firms facing financial constraints. The model predicts a large number of disparate findings in the empirical literature and so demonstrates its usefulness