The Determinants of Corporate Trade Credit Policies in a Bank-dominated Financial Environment: the Case of Finnish Small Firms
Abstract"This paper examines trade credit policies of small firms operating in a bank-dominated environment (Finland). We find that creditworthiness and access to capital markets are important determinants of trade credit extended by sellers. The level of purchases is positively correlated with the level of accounts payable. Larger and older firms and firms with strong internal financing are less likely to use trade credit, whereas firms with a high ratio of current assets to total assets, and firms subject to loan restructurings use it more. Negative loan decisions by financial intermediaries increase and a close bank-borrower relationship decreases the probability that a firm does not take advantage of trade credit discounts". Copyright Blackwell Publishers Ltd, 2006.
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Bibliographic InfoArticle provided by European Financial Management Association in its journal European Financial Management.
Volume (Year): 12 (2006)
Issue (Month): 1 ()
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1354-7798
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- Di Giuli, Alberta & Caselli, Stefano & Gatti, Stefano, 2011. "Are small family firms financially sophisticated?," Journal of Banking & Finance, Elsevier, vol. 35(11), pages 2931-2944, November.
- Thapa, Priya Darshini Pun, 2013. "How does profitability get affected by working capital management in food and beverages industry?," MPRA Paper 50926, University Library of Munich, Germany.
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07-18, Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke.
- Nakhoda, Aadil, 2012. "The influence of financial leverage of firms on their international trading activities," MPRA Paper 35765, University Library of Munich, Germany.
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