Trade credit behavior of Korean small and medium sized enterprises during the 1997 financial crisis

Junghwan Hyun

Journal of Asian Economics, 2017, vol. 50, issue C, 1-13

Abstract: This paper investigates the effect of the 1997 Korean financial crisis on the trade credit behavior of Korean small and medium sized enterprises (SMEs) using a unique panel dataset for the period 1994 to 1999. I uncover new evidence supporting the substitution and redistribution hypotheses, which contradicts earlier studies. Specifically, the results show that liquid SMEs provided more trade credit to their client firms during the credit contraction, while financially constrained SMEs received more trade credit from their suppliers. Further, I find evidence that SMEs in financially distressed regions relied more on trade credit than their counterparts in financially healthier regions.

Keywords: Trade credit; Bank credit; Liquidity; External financing; SMEs; Financial crisis; Financial constraints; Korea (search for similar items in EconPapers)
JEL-codes: G01 G30 G32 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1049007817300453
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:50:y:2017:i:c:p:1-13

DOI: 10.1016/j.asieco.2017.02.005

Access Statistics for this article

Journal of Asian Economics is currently edited by C. Wiemer

More articles in Journal of Asian Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().