Effect of Credit Rating on Trade Credit: Empirical Evidences from Pakistani Non-financial sector

Trade Credit versus Bank Credit during Financial Crises

Credit risk transfer and financial sector stability

In this paper, we study credit risk transfer (CRT) in an economy with endogenous financing (by both banks and non-bank institutions). Our analysis suggests that the incentive of banks to transfer credit risk is aligned with the regulatory objective of improving stability, and so the recent development of credit derivative instruments is to be welcomed. Moreover, we find the transfer of credit r...

An Empirical Investigation of Trade Credit Use

This paper investigates empirically the theoretical motivations for the use of trade credit by firms for purchases. The extent to which trade credit is used for purchases and the accounts payable to total assets ratio, i.e. the demand for trade credit, are modelled here as a function of transaction costs motivations, financing motivations, operational considerations, seller compliance issues, s...

Predicting Credit Rating and Credit Rating Changes: A New Approach

In this paper, we propose a hazard rate model for studying credit rating and credit rating changes. Theoretically the hazard rate model is more appropriate than the previous static models. Yet it is difficult to estimate hazard rate model, especially when the covariates are time-varying. This paper extends the results of Shumway(2001) and shows that a multiple-state hazard rate model can be est...

The Impact of Macroeconomic Uncertainty on Trade Credit for Non–Financial Firms

In this paper we hypothesize that greater macroeconomic uncertainty would cause firms to increasingly turn to their suppliers as a source of finance, making greater use of trade credit. We test this hypothesis using a panel of non–financial firms drawn from the annual COMPUSTAT database and show that an increase in macroeconomic uncertainty leads to a narrowing of the cross–sectional distributi...