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Trade credit and the joint effects of supplier and customer financial characteristics

We examine how access to bank credit affects trade credit in the supplier-customer relationships of U.S. public firms. For identification, we use exogenous liquidity shocks to supplier firms in the form of staggered changes to interstate bank branching laws. Using a variety of tests, we show that supplier firms with greater access to banking liquidity offer more trade credit to their customers. We also show that when bank branching restrictions are relaxed in the supplier's state, the supplier-customer relationship is more likely to survive. (C) 2015 Elsevier Inc. All rights reserved.

Identiferoai:union.ndltd.org:arizona.edu/oai:arizona.openrepository.com:10150/623187
Date01 1900
CreatorsShenoy, Jaideep, Williams, Ryan
ContributorsUniv Arizona, Eller Coll Management
PublisherACADEMIC PRESS INC ELSEVIER SCIENCE
Source SetsUniversity of Arizona
LanguageEnglish
Detected LanguageEnglish
TypeArticle
Rights© 2015 Elsevier Inc. All rights reserved.
Relationhttp://linkinghub.elsevier.com/retrieve/pii/S104295731500039X

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