How Trade Credit Differs from Loans: Evidence from Japanese Trading Companies
AbstractIn this paper we examine the determinants of the relationship between trade credit and bank loans. Previous studies of this relationship fall into two categories: (1) those emphasizing the difference between financial and non-financial institutions, and (2) those emphasizing the difference between credit instruments. By using data on trading companies that supply both loans and trade credit we are able to determine the relative importance of both institutional differences and instrumental differences for the trade credit-loan relationship. We find that trade credit and loans differ significantly even when offered by the same institutions, while loans extended by financial institutions and those extended by non-financial enterprises respond similarly.
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Bibliographic InfoPaper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 04028.
Length: 47 pages
Date of creation: Sep 2004
Date of revision:
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This paper has been announced in the following NEP Reports:
- NEP-ACC-2004-09-05 (Accounting & Auditing)
- NEP-ALL-2004-09-05 (All new papers)
- NEP-MFD-2004-09-12 (Microfinance)
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