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Voluntary Disclosure of Sales and the Extent of Trade Credit in Small Private Companies

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  • Stefanie Ceustermans
  • Diane Breesch
  • Joël Branson

Abstract

We examine the association between voluntary financial disclosure and the amount of obtained trade credit in a sample of small private Belgian companies. We argue that voluntary disclosure can help small private companies in mitigating information asymmetries that arise between the company and their suppliers. Using a propensity score matching procedure to control for selection bias, we find that voluntary financial disclosure by small and private companies is positively related to the level of trade credit. This is in line with the traditional view that asymmetric or incomplete information restricts access to external funds.

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  • Stefanie Ceustermans & Diane Breesch & Joël Branson, 2017. "Voluntary Disclosure of Sales and the Extent of Trade Credit in Small Private Companies," Accounting in Europe, Taylor & Francis Journals, vol. 14(3), pages 388-406, September.
    • Handle: RePEc:taf:acceur:v:14:y:2017:i:3:p:388-406
    DOI: 10.1080/17449480.2017.1282617
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    3. Farah Saerens & Stefanie Ceustermans, 2021. "Abbreviated or Micro-Entity Accounts? Effect of Financial Reporting Format on the Availability of Trade Credit," Sustainability, MDPI, vol. 13(15), pages 1-18, July.

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