IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Funzionamento della giustizia civile e struttura finanziaria delle imprese: il ruolo del credito commerciale

Listed author(s):
  • Amanda Carmignani


    (Banca d'Italia)

Registered author(s):

    This paper empirically investigates the role of the efficiency of judicial enforcement in shaping firms� financial structure, by focusing on the choice between trade credit and alternative external sources. Suppliers have an advantage over other short-term lenders in enforcing credit contracts, thus being less dependent on the institutional mechanisms for the protection of creditor rights. Trade credit represents in-kind finance: in contrast with other investors, who lend cash, suppliers lend inputs. Being illiquid, inputs are less easily diverted than cash, hence trade credit providers are less subject to moral hazard problems than other creditors. As a consequence, in countries where creditor protection is weaker the importance of trade credit compared to bank credit should be greater, especially when asymmetric information problems are more significant. The issue is analysed by using information on firm-specific characteristics and on the local structure of the manufacturing, of the banking and of the judicial sector over the period 1995-1998. The empirical evidence highlights the importance of judicial enforcement for corporate finance choices: in areas characterised by a lower degree of judicial enforcement, firms use more trade credit compared to alternative short-term sources. The effects vary according to firms� characteristics such as their credit-worthiness and the average cost of funds.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Paper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 497.

    in new window

    Date of creation: Jun 2004
    Handle: RePEc:bdi:wptemi:td_497_04
    Contact details of provider: Postal:
    Via Nazionale, 91 - 00184 Roma

    Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:bdi:wptemi:td_497_04. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.