Return to search

Trade credit terms: asymmetric information and price discrimination evidence from three continents

No / Trade credit terms offer firms contractual solutions to informational asymmetries between buyers and sellers. The credit period permits buyers to reduce uncertainty concerning product quality prior to payment, while the seller can reduce uncertainty concerning buyer payment intentions by prescribing payment before/on delivery or through two¿part payment terms and other mechanisms. Variation in trade credit terms also offers firms price discriminating opportunities. This study, drawing on the responses of 700 large firms in the US, UK and Australia, explores trade credit terms through the twin objectives of reducing information asymmetries and discriminatory pricing. Support is found for both theories.

Identiferoai:union.ndltd.org:BRADFORD/oai:bradscholars.brad.ac.uk:10454/3186
Date January 2005
CreatorsPike, Richard H., Lamminmäki, D., Cravens, K., Cheng, N.S.
Source SetsBradford Scholars
LanguageEnglish
Detected LanguageEnglish
TypeArticle, No full-text in the repository

Page generated in 0.0022 seconds