Buyers and suppliers have diverging interests about trade-credit maturities: buyers desire long payment periods as a source of cheap funding, while suppliers prefer swift payments to avoid locking up scarce liquidity in idle assets. A fast-growing financial product innovation - supply-chain...

This study investigates the effect of short sales on firms' use of trade credit. Using a sample of 3262 Chinese listed firms from 2007 to 2019, the analysis results show that both the deregulation and the magnitude of short sales negatively affect trade credit. The transmission mechanism...

This study investigates a non-instantaneous deteriorating two-warehouse inventory problem with allowable delay payments under inflation. The objective is to maximize the total profit per unit of time by determining the optimal order quantity, the product's selling price, and the business cycle...

This study examines the influence of environmental, social, and governance (ESG) performance on corporate trade credit financing based on Chinese A-share listed companies' data from 2018 to 2022. The empirical results revealed that enterprises with better ESG performance receive more trade...

This paper uses data from commercial banks and nonfinancial listed firms in Vietnam from 2007 to 2022 to address the effect of banking uncertainty on firms' trade credit. We find that trade credit increases with heightened uncertainty in the banking sector, which is more conspicuous in...

By using an enhanced enterprise matching approach, we obtained microdata on the supply chain interconnections between small and medium-sized enterprises (SMEs) and listed companies. Our findings suggest that becoming the main counterparties of listed companies can significantly improve the...

Our model indicates that European firms use trade credits to purchase 7% to 23% of tangible fixed assets and 15% to 28% of intangible assets in the short-run. A long-run target adjustment model shows that trade credits fund 1% of fixed assets for large firms, and from 4% to10% of fixed asset...

Purpose of the study: - In this paper, we are studying the relationship between cash flow volatility with the trade credit in Pakistan (Companies registered in Pakistan). Design /Methodology/Approach: - In this study, we have taken 100 companies registered in Pakistan we have summary statistics...

Annual report is essential for building trust and transparency between a company and its suppliers and customers. And easy-to-understand text in the report can help to develop long-term, mutually beneficial relationships. This study examines how annual report readability impacts the trade credit...

Prior studies have noted that firms with climate change exposure suffer from earnings and cash flow volatility and have difficulties raising capital. This study finds that such firms tend to invest more in working capital, mainly driven by increased investments in receivables (a conservative...

Our study investigated the interaction of credit from suppliers (trade payables) and credit given to customers (trade receivables) in order to better understand how the reliance on credit from suppliers and credit given to customers interact with each other to affect firms’ performance. Using...

Using a firm-level database covering 52 countries during the period 2004-2020, we investigate how legal institutions and the structure of banking systems affect the provision of trade credit for private firms. The results show that there is more reliance on trade credit versus short-term bank...

This paper explores the effect of China’s staggered rollout of social credit reform (hereafter “the reform”), designed to improve credit information and credit market efficiency, on firm-level trade credit financing. The reform improves firms’ access to trade credit financing in...

The significant role of Small and Medium Enterprises (SMEs) in the growth of the economy has been well-documented in the past few decades. Studies in literature have focused on the reasons behind the trade credit offerings and acceptance of SMEs, but empirical findings revealing the positive...

Factoring is a widely used finance solution for capital-constrained suppliers. To effectively avoid the risk of unpaid debt, incorporating trade credit insurance (TCI) into factoring has gained increasing popularity. Motivated by the practice that both suppliers and factors can act as TCI...