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Real Driver of Trade Credit

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  • TSURUTA Daisuke
  • UCHIDA Hirofumi

Abstract

Employing unique data from a corporate survey, this paper examines whether changes in the amount of firms' trade debt are driven by real and/or financial measures taken by the firms in response to exogenous shocks. We find that firms that adopted real measures reduced their trade debt, while those that adopted financial measures increased it. We also find that real measures were more common than financial ones. These findings imply that changes in the amount of underlying real transactions, not changes in the terms of credit, are the real driver of changes in the amount of trade credit.

Suggested Citation

  • TSURUTA Daisuke & UCHIDA Hirofumi, 2013. "Real Driver of Trade Credit," Discussion papers 13037, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:dpaper:13037
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    File URL: https://www.rieti.go.jp/jp/publications/dp/13e037.pdf
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    References listed on IDEAS

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    Cited by:

    1. Tsuruta, Daisuke, 2016. "No lending relationships and liquidity management of small businesses during a financial shock," Journal of the Japanese and International Economies, Elsevier, vol. 42(C), pages 31-46.

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