The study, aimed at evaluating the likely effects of the EC Directive on late payments, provides direct evidence that interfirm credit received by Italian manufacturing firms is, if ever, only slightly more expensive than bank loans. An econometric exercise shows that financial determinants have a stronger impact on recorded credit and debt periods for larger firms, able to use trade credit to smooth their cycle; smaller firms seem to adapt more passively to counterparties' supply and demand. A novel finding is that shorter credit periods are associated to the directly measured discount offered for quicker payments.
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Paper provided by Universita di Modena e Reggio Emilia, Dipartimento di Economia Politica in its series Heterogeneity and monetary policy with number
0103.
Find related papers by JEL classification: E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Capital and Ownership Structure
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