Credit sales and advance payments: substitutes or complements?

Simona Mateut and Piercarlo Zanchettin

No 12/18, Discussion Papers in Economics from Division of Economics, School of Business, University of Leicester

Abstract: We investigate the interaction between two terms of payment, supplier credit sales and customer advance payment. We find evidence that advance payments may signal customer creditworthiness and increase trade credit extension when we control for vendor size in international transactions or for the traded goods characteristics.

Keywords: trade credit; advance payment; signalling (search for similar items in EconPapers)
JEL-codes: G31 G32 (search for similar items in EconPapers)
Date: 2012-06
New Economics Papers: this item is included in nep-ban and nep-cfn
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Related works:
Journal Article: Credit sales and advance payments: Substitutes or complements? (2013)
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