Firms' resilience to financial constraints: The role of trade credit

Arbeitspapier

We study the role of trade credit in enhancing the resilience of financially constrained firms from 2010 to 2017. Implicit borrowing in trade finance allows financially constrained firms to bridge the financing gap, expand employment by 8.26 per cent, and increase average firm profits significantly. Trade finance suppliers, not financially constrained firms, experience a surge of 7.99 per cent in the average rate of sales growth. Corporate resilience to financial constraints occasioned by trade credit is quite robust to controlling for relevant factors and employing various estimation techniques. While countries strive to develop their financial sector to fund economic activity and growth, they need to facilitate a business environment that promotes trade credit flows among firms as a second-best alternative to bank financing.

Angaben zum Objekt

• ISBN: 978-92-9267-016-0
• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: WIDER Working Paper ; No. 2021/78

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill ; Firm Performance: Size, Diversification, and Scope
• Thema: financial constraints ; trade credit ; employment ; firm profits ; sales growth

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Marcelin, Isaac ; Brink, Daniel ; Sun, Wei
• Ereignis: Veröffentlichung
• (wer): The United Nations University World Institute for Development Economics Research (UNU-WIDER)
• (wo): Helsinki
• (wann): 2021

Weitere Informationen

• DOI: doi:10.35188/UNU-WIDER/2021/016-0
• Handle: http://hdl.handle.net/10419/243404
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ