Credit chains and sectoral comovemen t: does the use of trade credit amplify sectoral shocks ?
This paper provides evidence of the presence and relevance of a credit-chain amplification mechanism by looking at its implications for the correlation of industries. In particular, it tests the hypothesis that an increase in the use of trade-credit along the input-output chain linking two industries results in an increase in their correlation. The analysis uses detailed data on the correlations and input-output relations of 378 manufacturing industry-pairs across 44 countries with different degrees of use of trade credit. The results provide strong support for this hypothesis and indicate that the mechanism is quantitatively relevant.
|Date of creation:||01 Feb 2008|
|Contact details of provider:|| Postal: 1818 H Street, N.W., Washington, DC 20433|
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
Other versions of this item:
- Claudio Raddatz, 2010. "Credit Chains and Sectoral Comovement: Does the Use of Trade Credit Amplify Sectoral Shocks?," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 985-1003, November.
- Fabrizio Coricelli & Isabelle Roland, 2010.
"Credit and recessions,"
Documents de travail du Centre d'Economie de la Sorbonne
10022, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
- Fabrizio Coricelli & Isabelle Roland, 2010. "Credit and recessions," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00469521, HAL.
- Kutsuna, Kenji & Smith, Janet Kiholm & Smith, Richard & Yamada, Kazuo, 2016. "Supply-chain spillover effects of IPOs," Journal of Banking & Finance, Elsevier, vol. 64(C), pages 150-168.
- Bams, Dennis & Pisa, Magdalena & Wolff, Christian C, 2015. "Ripple effects from industry defaults," CEPR Discussion Papers 10891, C.E.P.R. Discussion Papers.
- Saldías, Martín, 2013. "A market-based approach to sector risk determinants and transmission in the euro area," Journal of Banking & Finance, Elsevier, vol. 37(11), pages 4534-4555.
- Martín Saldías, 2011. "A Market-based Approach to Sector Risk Determinants and Transmission in the Euro Area," Working Papers w201130, Banco de Portugal, Economics and Research Department.
- Saldías, Martín, 2013. "A market-based approach to sector risk determinants and transmission in the euro area," Working Paper Series 1574, European Central Bank.
- Péter Csóka & Dániel Havran & Nóra Szűcs, 2015. "Corporate financing under moral hazard and the default risk of buyers," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 23(4), pages 763-778, December.
- Peter Csoka & Daniel Havran & Nora Szucs, 2013. "Corporate financing under moral hazard and the default risk of buyers," IEHAS Discussion Papers 1322, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
- Reza Y. Siregar & C.S. Lim, Vincent, 2011. "Real Sector Propagation of the Recent Global Financial Crisis: An Integrative Report," Staff Papers, South East Asian Central Banks (SEACEN) Research and Training Centre, number sp83.
- Bank for International Settlements, 2014. "Trade finance: developments and issues," CGFS Papers, Bank for International Settlements, number 50.
- Hazama, Makoto & Uesugi, Iichiro, 2012. "Measuring the Systemic Risk in Interfirm Transaction Networks," Working Paper Series 20, Center for Interfirm Network, Institute of Economic Research, Hitotsubashi University.
- Hazama, Makoto & Uesugi, Iichiro, 2017. "Measuring the Systemic Risk in Interfirm Transaction Networks," HIT-REFINED Working Paper Series 66, Institute of Economic Research, Hitotsubashi University.
- Bams, Dennis & Bos, Jaap & Pisa, Magdalena, 2016. "Trade credit: Elusive insurance of firm growth," Research Memorandum 029, Maastricht University, Graduate School of Business and Economics (GSBE).
- Yang Jiao & Yi Wen, 2012. "Capital, finance, and trade collapse," Working Papers 2012-003, Federal Reserve Bank of St. Louis.
- Drago Bergholt & Tommy Sveen, 2014. "Sectoral interdependence and business cycle synchronization in small open economies," Working Paper 2014/04, Norges Bank.
- Drago Bergholt & Tommy Sveen, 2014. "Sectoral Interdependence and Business Cycle Synchronization in Small Open Economies," Working Papers 0020, Centre for Applied Macro- and Petroleum economics (CAMP), BI Norwegian Business School.
- Peter Broer & JÃ¼rgen Antony, 2010. "Linkages between the Financial and the Real Sector of the Economy: A Literature Survey," CPB Document 216, CPB Netherlands Bureau for Economic Policy Analysis.
- Coricelli, Fabrizio & Frigerio, Marco, 2016. "Inter-Enterprise Credit and Adjustment During Financial Crises: The Role of Firm Size," CEPR Discussion Papers 11680, C.E.P.R. Discussion Papers.
- TSURUTA Daisuke, 2017. "Working Capital Management during the Global Financial Crisis: Evidence from Japan," Discussion papers 17045, Research Institute of Economy, Trade and Industry (RIETI).
- Alan Finkelstein-Shapiro & Andrés González Gómez, 2015. "Macroprudential Policy and Labor Market Dynamics in Latin America," IDB Publications (Working Papers) 88738, Inter-American Development Bank.
- Fabrizio Coricelli & Marco Frigerio, 2015. "The Credit-Output Relationship During the Recovery from Recession," Open Economies Review, Springer, vol. 26(3), pages 551-579, July.
- Fabrizio Coricelli & Marco Frigerio,, 2015. "The Credit-Output Relationship During the Recovery from Recession," PSE - Labex "OSE-Ouvrir la Science Economique" halshs-01267259, HAL.
- Jinjarak, Yothin, 2013. "Supply Chains and Credit-Market Shocks: Some Implications for Emerging Markets," ADBI Working Papers 443, Asian Development Bank Institute.
- Alyson C. Ma & Ari Van Assche, 2012. "Is East Asia's Economic Fate Chained to the West?," CIRANO Working Papers 2012s-11, CIRANO.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:4525. 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: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.
Follow series, journals, authors & more
New papers by email
Subscribe to new additions to RePEc
Public profiles for Economics researchers
Various rankings of research in Economics & related fields
Who was a student of whom, using RePEc
Curated articles & papers on various economics topics
Upload your paper to be listed on RePEc and IDEAS
Blog aggregator for economics research
Cases of plagiarism in Economics
Job Market Papers
RePEc working paper series dedicated to the job market
Pretend you are at the helm of an economics department
Services from the StL Fed
Data, research, apps & more from the St. Louis Fed