IDEAS home Printed from https://ideas.repec.org/p/rug/rugwps/11-738.html
   My bibliography  Save this paper

Trade credit and company performance during the 2008 financial crisis

Author

Listed:
  • K. KESTENS
  • P. VAN CAUWENBERGE
  • H. VANDER BAUWHEDE

Abstract

We investigate whether the 2008 financial crisis had an impact on companies’ trade credit, and whether changes in trade credit mitigated the crisis’ impact on firm profitability. We document that the availability of trade credit decreased, and that this decline is more pronounced, the higher companies’ pre-crisis reliance on short-term debt. We further report evidence that the redistribution hypothesis holds during crisis periods. Finally, we show that the crisis had a negative impact on company performance, but that this impact was lower (greater) for firms which report an increase in trade receivables (payables) in crisis compared to precrisis periods.

Suggested Citation

  • K. Kestens & P. Van Cauwenberge & H. Vander Bauwhede, 2011. "Trade credit and company performance during the 2008 financial crisis," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 11/738, Ghent University, Faculty of Economics and Business Administration.
    • Handle: RePEc:rug:rugwps:11/738
    as

    Download full text from publisher

    File URL: http://wps-feb.ugent.be/Papers/wp_11_738.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Michiel De Meyere & Heidi Vander Bauwhede & Philippe Van Cauwenberge, 2018. "The impact of financial reporting quality on debt maturity: the case of private firms," Accounting and Business Research, Taylor & Francis Journals, vol. 48(7), pages 759-781, November.
    2. Abdullah Al Mahmud & Muhammad Shahin Miah & Mohammad Rakib Uddin Bhuiyan, 2022. "Does Trade Credit Financing Affect Firm Performance? Evidence from an Emerging Market," IJFS, MDPI, vol. 10(4), pages 1-19, September.
    3. Cristina Martínez Sola & Pedro J. García-Teruel & Pedro Martínez Solano, 2012. "Trade credit policy and firm value," Working Papers. Serie EC 2012-01, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rug:rugwps:11/738. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Nathalie Verhaeghe (email available below). General contact details of provider: https://edirc.repec.org/data/ferugbe.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.