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The relationship between trade credit, bank credit and financial structure : from firm-level non-linearities to financial development heterogeneity. A study on MENA firm-level data


  • Jézabel Couppey-Soubeyran

    () (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Jérôme Héricourt

    () (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, EQUIPPE - Economie Quantitative, Intégration, Politiques Publiques et Econométrie - Université de Lille, Sciences et Technologies - Université de Lille, Sciences Humaines et Sociales - PRES Université Lille Nord de France - Université de Lille, Droit et Santé)


Using a database of more than 1,100 firms in the MENA region, this article looks at the determinants of demand for trade credit, particularly access to bank credit, size, age and the quality of the firm's financial structure. We show that the difficulty of gaining acces to bank credit positively influences the use of trade credit, and thus demonstrate the substitutability of bank credit and trade credit. Besides, firm's non-financial characteristics, namely age and size do not influence similarly the probability of having trade credit and the volume of trade credit raised. Additional investigations strongly support the existence of non-linearities in the relationship between trade credit and firm's financial structure and size. Finally, financial development emerges as a key feature of the demand for trade credit. Indeed, we show that most firm-level characteristics lose their influence on trade credit when financial development is high enough. With financial development, trade credit gets primarily driven by trade relationships and does not appear any more as a palliative solution when bank credit access is difficult.

Suggested Citation

  • Jézabel Couppey-Soubeyran & Jérôme Héricourt, 2011. "The relationship between trade credit, bank credit and financial structure : from firm-level non-linearities to financial development heterogeneity. A study on MENA firm-level data," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00609625, HAL.
  • Handle: RePEc:hal:cesptp:halshs-00609625
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    References listed on IDEAS

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    Cited by:

    1. Sangeeta Pratap & Carlos Urrutia & Felipe Meza, 2017. "Credit, Misallocation and Productivity Growth: A Disaggregated Analysis," 2017 Meeting Papers 538, Society for Economic Dynamics.
    2. repec:eur:ejesjr:146 is not listed on IDEAS
    3. Anna Białek-Jaworska & Natalia Nehrebecka, 2015. "Rola kredytu handlowego w finansowaniu przedsiębiorstw," Gospodarka Narodowa, Warsaw School of Economics, issue 5, pages 33-64.
    4. Natalia Nehrebecka & Aneta Dzik-Walczak, 2016. "Publication selection bias in the sources of financing the enterprises research? A Meta-Regression Analysis," Working Papers 2016-02, Faculty of Economic Sciences, University of Warsaw.

    More about this item


    Trade credit; bank credit; financial constraints; financial development.; Crédit commercial; crédit bancaire; contrainte financière; développement financier.;

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • G2 - Financial Economics - - Financial Institutions and Services
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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