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Contribution Details
| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | Firms as liquidity providers: Evidence from the 2007–2008 financial crisis |
| Organization Unit | |
| Authors |
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| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | Journal of Financial Economics |
| Publisher | Elsevier |
| Geographical Reach | international |
| ISSN | 0304-405X |
| Volume | 190 |
| Number | 1 |
| Page Range | 272 - 291 |
| Date | 2013 |
| Abstract Text | Using a supplier–client matched sample, we study the effect of the 2007–2008 financial crisis on between-firm liquidity provision. Consistent with a causal effect of a negative shock to bank credit, we find that firms with high precrisis liquidity levels increased the trade credit extended to other corporations and subsequently experienced better performance as compared with ex ante cash-poor firms. Trade credit taken by constrained firms increased during this period. These findings are consistent with firms providing liquidity insurance to their clients when bank credit is scarce and offer an important precautionary savings motive for accumulating cash reserves. |
| Digital Object Identifier | 10.1016/j.jfineco.2013.02.010 |
| Other Identification Number | merlin-id:21809 |
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