Trade Credit: Suppliers as Debt Collectors and Insurance Providers

Cuñat, Vicente

doi:10.1093/rfs/hhl015

Cited by 720 publications

(659 citation statements)

References 32 publications

(34 reference statements)

Supporting

Mentioning

566

Contrasting

Unclassified

Order By: Relevance

“…So trade credit works as an alternative mean to finance production. Also Cuñat (2007) argues that fast growing firms may finance themselves with trade credit when other types of finance are not sufficiently available. Fisman and Love (2003) extend the analysis to link trade credit substitutability for institutional financing and the overall development of the financial sector.…”

Section: Literature the Trade Credit Channel And Firm Performancementioning

confidence: 99%

See 1 more Smart Citation

Do firms use the trade credit channel to manage growth?

Ferrando

Mulier

2013

Journal of Banking & Finance

201

185

View full text Add to dashboard Cite

show abstract

Section: Literature the Trade Credit Channel And Firm Performancementioning

confidence: 99%

“…Firms will however only offer additional trade credit when they believe there is a future surplus of having a long-lasting relation with that customer (Cuñat, 2007).…”

Section: Literature the Trade Credit Channel And Firm Performancementioning

confidence: 99%

Do firms use the trade credit channel to manage growth?

Ferrando

Mulier

2013

Journal of Banking & Finance

201

185

View full text Add to dashboard Cite

show abstract

“…These studies focus on how it can help a company to increase sales (Brennan et al 1988;Emery 1987;Meltzer 1960;Petersen and Rajan 1997;Schwartz 1974), enabling it to gear up production in advance of the receipt of monies owed, and hence supporting growth (Cuñat 2007;Petersen and Rajan 1997). Studies also examine the use of trade credit as a substitute for bank credit, particularly when the latter is difficult to come by (Gertler and Gilchrist 1994;Jaffee 1969;Nilsen 2002;Schwartz 1974).…”

Section: An Overview Of Trade Creditmentioning

confidence: 99%

On the Ethics of Trade Credit: Understanding Good Payment Practice in the Supply Chain

Cowton

San-José

2016

J Bus Ethics

View full text Add to dashboard Cite

In spite of its commercial importance and signs of clear concern in public policy arenas, trade credit has not been subjected to systematic, extended analysis in the business ethics literature, even where suppliers as a stakeholder group have been considered. This paper makes the case for serious consideration of the ethics of trade credit and explores the issues surrounding slow payment of debts. It discusses trade debt as a kind of promise, butnoting that not all promises are good ones-goes on to develop an analysis of the ethics of trade credit grounded in an understanding of its fundamental purpose. Making a distinction between ''operating'' trade credit and ''financial'' trade credit, the paper provides an account of the maximum period for which it is appropriate for one company to delay payment to another from which it has purchased goods or services. The concern of commentators and policy makers that companies should not take too long to pay their debts is affirmed, but the understanding of what timely payment means is significantly finessed, with one conclusion being that, if debts have not already been settled according to acceptable standard terms of trade, cash should pass quickly back along the supply chain once the customer in the final product market has paid. The analysis has implications not only for companies that take credit but also for external parties that seek to rate companies or set regulations according to speed of payment-an approach that is shown to be misleadingly simplistic, albeit well intentioned. A corresponding important responsibility for suppliers, not to extend excessive credit (and thus act as a quasi-bank), also follows from the analysis developed. Having provided a novel analysis of an important business problem, the paper then discusses some of the related practical issues and makes suggestions for further research.

show abstract

“…Firms with high growth rates tend to use more trade credit (Cunat, 2007;Tsuruta, 2008). The reason for this is that fast growing firms need extra money to finance their growth.…”

Section: Demand For Trade Creditmentioning

confidence: 99%

Product Innovation and Trade Credit Demand and Supply: Evidence from European Countries

Nielen¹

2016

Contributions to Management Science

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractThis study addresses the relationship between product innovation and the demand and supply of trade credit. Theoretical as well as empirical studies are used to derive the hypothesis of a positive link between product innovation and trade credit demand and supply. Using a sample covering SMEs from 24 European countries this relationship is tested empirically. Basically the estimation results confirm that introducing a product innovation is positively related with demand and provision of trade credit for SMEs. Innovative firms have a higher probability to face credit constraints and therefore have a higher probability to demand for trade credit. On the other hand suppliers have an incentive to provide trade credit especially to innovative customers because they have an easier access to information about the growth potential of innovative SMEs compared to banks. JEL-Codes: G32, O31, L20

show abstract

Trade Credit: Suppliers as Debt Collectors and Insurance Providers

Cited by 720 publications

References 32 publications

Do firms use the trade credit channel to manage growth?

Do firms use the trade credit channel to manage growth?

On the Ethics of Trade Credit: Understanding Good Payment Practice in the Supply Chain

Product Innovation and Trade Credit Demand and Supply: Evidence from European Countries

Contact Info

Product

Resources

About