Submitted by Victor Dahan (victordahan@gmail.com) on 2018-04-27T18:12:07Z No. of bitstreams: 1 dissertaçao victor dahan.pdf: 830090 bytes, checksum: abd452449e803a9e167656fbab4240bf (MD5) / Approved for entry into archive by ÁUREA CORRÊA DA FONSECA CORRÊA DA FONSECA (aurea.fonseca@fgv.br) on 2018-05-03T20:52:44Z (GMT) No. of bitstreams: 1 dissertaçao victor dahan.pdf: 830090 bytes, checksum: abd452449e803a9e167656fbab4240bf (MD5) / Made available in DSpace on 2018-05-08T14:30:40Z (GMT). No. of bitstreams: 1 dissertaçao victor dahan.pdf: 830090 bytes, checksum: abd452449e803a9e167656fbab4240bf (MD5) Previous issue date: 2018-04-26 / We investigate how the provision of trade credit by suppliers reacts when their customer firms suffer an adverse shock. We exploit an exogenous adverse shock to firms in the Brazilian food industry caused by the public announcement of a fraud investigation named Operation Weak Flesh. Using a within-firm differences-in-differences identification strategy, we found that customers suffered a negative impact of around 20 to 30% in their accounts payable, while suppliers reduced their credit provision by around 5 to 6%. The evidence suggests that suppliers would rather shield themselves against increased risks in the supply chain than try to save their customers and their relationship with them.