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An empirical analysis of the impact of trade credit on bank debt restructuring

An empirical analysis of the impact of trade credit on bank debt restructuring Abstract This paper analyzes the relationship between the likelihood that Italian firms implement bank debt restructuring and the trade credit. It uses a sample of 2377 Italian firms over the period of 2010–2014. The empirical analysis shows that the amount of payables and the unexpected delay in the payment of trade credit are strictly related to the firm’s financial distress. Specifically, the findings suggest that companies in financial distress have used trade credit extensively and suffer from the deferment of receivables. This result supports the hypothesis of a potential credit contagion channel in the supply chain with a cascading effect between buyers and suppliers. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png "Economia Politica" Springer Journals

An empirical analysis of the impact of trade credit on bank debt restructuring

"Economia Politica" , Volume 36 (2): 24 – Jul 1, 2019

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References (88)

Publisher
Springer Journals
Copyright
2018 Springer International Publishing AG, part of Springer Nature
ISSN
1120-2890
eISSN
1973-820X
DOI
10.1007/s40888-018-0110-x
Publisher site
See Article on Publisher Site

Abstract

Abstract This paper analyzes the relationship between the likelihood that Italian firms implement bank debt restructuring and the trade credit. It uses a sample of 2377 Italian firms over the period of 2010–2014. The empirical analysis shows that the amount of payables and the unexpected delay in the payment of trade credit are strictly related to the firm’s financial distress. Specifically, the findings suggest that companies in financial distress have used trade credit extensively and suffer from the deferment of receivables. This result supports the hypothesis of a potential credit contagion channel in the supply chain with a cascading effect between buyers and suppliers.

Journal

"Economia Politica"Springer Journals

Published: Jul 1, 2019

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