This paper investigates the redistributional view of trade credit from the demand side, based on a unique micro data of Japanese small firms where information on transactions of intermediate goods between firms of different size is available. The redistributional hypothesis is tested in two steps. In the first step we examine the relationship of customer dependence on bank loans with a higher proportion of purchases from large suppliers. In the second step we examine the effect of a dependence on large suppliers on trade credit. We find evidence supporting the redistributional hypothesis for solvent customers, but not for debt-overhang customers.
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Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number
09029.
Length: 30 pages Date of creation: Jun 2009 Date of revision: Handle: RePEc:eti:dpaper:09029
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