Fernandes, Filipa and Guariglia, Alessandra and Kontonikas, Alexandros and Tsoukas, Serafeim (2024) Why do firms extend trade credit? The role of inventories. International Journal of Finance and Economics. DOI https://doi.org/10.1002/ijfe.2975
Fernandes, Filipa and Guariglia, Alessandra and Kontonikas, Alexandros and Tsoukas, Serafeim (2024) Why do firms extend trade credit? The role of inventories. International Journal of Finance and Economics. DOI https://doi.org/10.1002/ijfe.2975
Fernandes, Filipa and Guariglia, Alessandra and Kontonikas, Alexandros and Tsoukas, Serafeim (2024) Why do firms extend trade credit? The role of inventories. International Journal of Finance and Economics. DOI https://doi.org/10.1002/ijfe.2975
Abstract
We are the first to explore the role of inventories as a trade credit driver in an economic/financial crisis setting. To this end, we make use of a panel of 198,024 manufacturing firms from eleven euro-area countries over the period 2006–2022. We find an inverse relationship between the stock of inventories and trade credit extended, which is magnified during the recent sovereign debt crisis. These results are robust to using different definitions of trade credit extended and of the crisis. Furthermore, we find that the association between inventories and trade credit extended is driven by financially constrained firms and firms producing differentiated products.
Item Type: | Article |
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Uncontrolled Keywords: | differentiated products; euro-area; financial constraints; inventories; sovereign debt crisis; trade credit |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Essex Business School |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 16 Jul 2024 11:35 |
Last Modified: | 16 Jul 2024 11:36 |
URI: | http://repository.essex.ac.uk/id/eprint/38076 |
Available files
Filename: Int J Fin Econ - 2024 - Fernandes - Why do firms extend trade credit The role of inventories.pdf
Licence: Creative Commons: Attribution 4.0