Not logged in.
Quick Search - Contribution
|Title||Trade Credit Use as Firms Approach Default|
|Item Subtype||Original Work|
|Status||Published electronically before print/final form (Epub ahead of print)|
|Journal Title||Journal of Money, Credit and Banking|
|Abstract Text||Using a sample of distressed firms with information about suppliers, we document an average fall in the use of trade credit as firms approach bank-ruptcy compared to a control sample of non-bankrupt firms. However, we uncover a large degree of heterogeneity across suppliers. Suppliers facing high switching costs maintain their business ties with the distressed firms as they approach bankruptcy, and provide them more trade credit. Suppliers in concentrated markets provide temporary support to their clients. Overall, the findings of this paper show that switching costs are fundamental to ex-plain whether suppliers provide liquidity to their distressed clients or not.|
EP3 XML (ZORA)