Dual class firms and trade credit

Nilesh B. Sah and Deepak G. More

Finance Research Letters, 2022, vol. 46, issue PA

Abstract: Firms with dual class structure can suffer from poor corporate governance and may utilize strategies that can help them avert monitoring by outsiders. We find that dual class firms use less trade credit as compared to non-dual class firms. We believe that this behavior is motivated by their antipathy towards supplier oversight. Our results are especially relevant for non-manufacturing and high bargaining power dual class firms. We extend the literature by shedding light on trade credit policies of dual class firms and by presenting an additional metric to assess operational transparency and monitoring preferences of dual class firms.

Keywords: Dual class; Trade credit; Monitoring; Corporate governance (search for similar items in EconPapers)
JEL-codes: G30 G32 G34 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:46:y:2022:i:pa:s1544612321003354

DOI: 10.1016/j.frl.2021.102303

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