Add to ORKGDespite strong evidence that suppliers of inputs are informed lenders, the cost of trade credit typically does not vary with borrowing firm characteristics. We solve this puzzle by demonstrating that it is optimal for suppliers to keep the riskier firms indifferent between trade credit and loans from uninformed lenders. Because these uninformed loans vary across industries but not with firm characteristics, the same pattern applies to the cost of trade credit. The model predicts that the cost of trade credit is more likely to vary with firm characteristics in industries that are plagued by moral hazard problems or financial distress
Trade credits are the main source of firm's external finance, despite they are observationally more ...
Companies in a broad range of industries and economies rely heavily on external sources to finance t...
It is typically less profitable for an opportunistic borrower to divert inputs than to divert cash. ...
Despite strong evidence that suppliers of inputs are usually informed lenders, the cost of trade cre...
Trade credit is a non-bank financing offered by a supplier to finance the purchase of its product. T...
It is typically less profitable for an opportunistic borrower to divert inputs than to divert cash. ...
Firms procure funds not only from specialized financial intermediaries, but also from suppliers, gen...
There are two fundamental puzzles about trade credit: why does it appear to be so expensive, and why...
Trade credits represent an important source of financing for all corporations. Rajan and Zingales (1...
We relate trade credit to product characteristics and aspects of bank--firm relationships and docume...
Firms in modern developed economies can choose to borrow from banks or from trade partners. Using fi...
Firms depend heavily on trade credit. This paper introduces a trade credit network into a structural...
It is typically less profitable for an opportunistic borrower to divert inputs than to divert cash. ...
Assuming that firms' suppliers are better able to extract value from the liquidation of assets in de...
It is typically less profitable for an opportunistic borrower to divert inputs than to divert cash. ...
Trade credits are the main source of firm's external finance, despite they are observationally more ...
Companies in a broad range of industries and economies rely heavily on external sources to finance t...
It is typically less profitable for an opportunistic borrower to divert inputs than to divert cash. ...
Despite strong evidence that suppliers of inputs are usually informed lenders, the cost of trade cre...
Trade credit is a non-bank financing offered by a supplier to finance the purchase of its product. T...
It is typically less profitable for an opportunistic borrower to divert inputs than to divert cash. ...
Firms procure funds not only from specialized financial intermediaries, but also from suppliers, gen...
There are two fundamental puzzles about trade credit: why does it appear to be so expensive, and why...
Trade credits represent an important source of financing for all corporations. Rajan and Zingales (1...
We relate trade credit to product characteristics and aspects of bank--firm relationships and docume...
Firms in modern developed economies can choose to borrow from banks or from trade partners. Using fi...
Firms depend heavily on trade credit. This paper introduces a trade credit network into a structural...
It is typically less profitable for an opportunistic borrower to divert inputs than to divert cash. ...
Assuming that firms' suppliers are better able to extract value from the liquidation of assets in de...
It is typically less profitable for an opportunistic borrower to divert inputs than to divert cash. ...
Trade credits are the main source of firm's external finance, despite they are observationally more ...
Companies in a broad range of industries and economies rely heavily on external sources to finance t...
It is typically less profitable for an opportunistic borrower to divert inputs than to divert cash. ...