In this paper we examine the main aspects of Italian factoring market and its evolution during last two decades. Moreover, we analyze the characteristics of firms accessing this kind of financing. In Italy factoring market size is the third in the world in absolute terms (amount of turnover), after U.K. and U.S., and the first one in relative terms (turnover to GDP ratio). This diffusion is related to the widespread use of postponed payment in commercial transaction, giving rise to a large amount of trade credit. At the end of 2002, financial factors market share was about two third. The remaining part was referred to industrial factors, that are specialized in “indirect” factoring, i.e. providing external funding to suppliers of the industrial group companies. This is an Italian market peculiarity owed to the opportunity for the debtor to prevent the trade credit to be transferred without his agreement. Firms accessing factoring show a greater financial pressure: the higher the leverage and the lower the cash flow and liquidity indicators, the higher is the probability to factor accounts receivable. The role of financial hypothesis in explaining the factoring choice is weaker for industrial factors customers, for which commercial reasons seem to be prevalent.
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Find related papers by JEL classification: G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Capital and Ownership Structure G29 - Financial Economics - - Financial Institutions and Services - - - Other E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy K22 - Law and Economics - - Regulation and Business Law - - - Corporation and Securities Law L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
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