We examine the impact of undervaluation on a firm's use trade credit. To address potential endogeneity bias, we construct our instrumental variable based mutual fund outflow-driven price pressure, and measure allows us to distinguish misvaluation from fair valuation. find that suppliers play an important role in providing temporary bridge financing when firm is undervalued. The effect varies wi...

Trade credit is provided by suppliers to meet the purchase needs of retailers, playing a more and important role in trade. In this paper, effects preferential on retailers' business decisions are investigated under capital constraints perfectly competitive market. game model, loan competition conditions considered when banks manufacturers offer capital-constrained retailers. proposed different ...

Abstract This study is designed to solve supply chain inefficiencies caused by some members' financial problems, such as capital shortages and financing restrictions in a stochastic environment. To this end, we have established finance framework designing two novel coordinating contracts based on trade credit for different problem settings. These are modeled the form of multi-leader Stackelberg...

We present novel empirical evidence on the use of off-balance sheet financing by publiclytraded, U.S. nonfinancial firms. We find that about 5 percent of nonfinancial firms reported using a special purpose financing vehicle (SPV) to finance receivables in 2006. At the origination of the off-balance sheet financing program, firms experienced abnormal increases in stock prices on the order of 2 p...

This paper examines access to external financing in the privatization context and provides new evidence on the effects of financing constraints on performance and investment. Ownership reforms increase firms’ reliance on external financing. Empirically, performance and investment changes around ownership reforms are increasing in country-level measures of access to credit. The presence of a sev...

A positive corporate reputation is generally taken to be a valuable resource leading to competitive advantage. In this paper we examine the association between a firm's media reputation and the amount of trade credit given in a sample of listed UK firms. Consistent with expectations, our results show that a firm's willingness to extend trade credit to its customers is inversely related to its m...

This paper explains the relationship between the debt financing and market value from about 272 Chinese real estate companies, which are all from Shanghai Stock Exchange and Shenzhen Stock Exchange between 2002 and 2007.We conduct an empirical study, the empirical results show that our country’s real estate listing of corporate debt financing relatively large proportion of total assets, average...

We show how trade credit use depends on the value of collateral in a repossession, as well as the extent to which firms face adverse selection problems when dealing with an outside investor. The theory explains: why trade credit is short term credit, why firms simultaneously take and extend credit to other firms with similar levels of creditworthiness, why firms whose prospects start to deterio...

In this paper we investigate the behaviour of credit default in start-up companies. Using a logit regression technique on a panel data of 1430 start-ups and considering a tracking period of three years, we tested the impact on the probability of occurrence of the first credit event in financing agreements due to variables grouped into three categories: financial capital, human capital and indus...