This paper examines how competition among suppliers affects their willingness to provide trade credit financing. Trade credit extended by a supplier to a cash constrained retailer allows the latter to increase cash purchases from its other suppliers, leading to a free rider problem. A supplier that represents a smaller share of the retailer’s purchases internalizes a smaller part of the benefit...

This paper examines the influence of staggered implementation Industry Information Disclosure Guidelines on trade credit financing. Using a sample China’s A-share listed firms from 2007 to 2019, I show that obtain significantly more their suppliers when they disclose industry-specific information. The main results are robust numerous additional checks. positive association is pronounced firm’s ...

The main purpose of this paper is to investigate the optimal retailer’s replenishment decisions under two levels of trade credit policy within the economic production quantity (EPQ) framework. We assume that the supplier would offer the retailer a delay period and the retailer also adopts the trade credit policy to stimulate his/her customer demand to develop the retailer’s replenishment model ...

Using a sample of Chinese listed companies from 2009 to 2020, this study investigates the impact ESG ratings on corporate trade credit financing. The results suggest that performance by can significantly improve level positive effect rating financing is more pronounced when company hires “Big4” auditor, or locates in region with higher degree marketization, and followed analysts. still hold aft...

We study how corporate financing evolved during the Twentieth century in Britain. We document a remarkable transition from single to multiple firm-bank relationships. Larger, global, or transparent companies with greater needs for bank credit were more likely to add a bank, especially when located in more competitive local banking markets. Deregulation and intensifying competition in the bankin...

This paper builds a comprehensive model that treats trade credit as the interaction of financing, operations, marketing and default-risk management. Our model is featured by using a two-stage lottery method to describe default risk, in the context of which the incentive-compatible model is formulated. We find that the capital cost of the supplier is the most important factor determining the cre...

Email: [email protected] Abstract: Many researchers have assumed one stage trade credit financing. In this study, we considered two levels of trade credit policy using Discounted Cash Flow (DCF) approach. Demand rate is considered to be stock-dependent for the first level (credit demand) and constant for second level (cash demand). Mathematical models are derived under two differen...