Heterogeneous effects of public listing on the usage of trade credit: Evidence from Korean chaebol versus non-chaebol firms

Hyun Joong Im, Inji Jung and Jiyeon Kim

Research in International Business and Finance, 2025, vol. 76, issue C

Abstract: Using a unique dataset of Korean firms, we demonstrate that the effects of public listing on the usage of trade credit are heterogeneous between chaebol and non-chaebol firms. While we find a significant negative relationship between public listing and the usage of trade credit for non-chaebol firms, we do not find any significant relationship for chaebol firms. Consistent with prior literature, public listing allows non-chaebol firms to have greater access to cheaper and less risky sources of external capital, thereby relying less on supplier financing, that is, using less trade credit. The lack of a significant impact for chaebol firms could be attributed to the effectiveness of their internal capital markets, which relax their financial constraints. These findings provide additional evidence supporting well-functioning internal capital markets among Korean chaebol firms.

Keywords: Trade credit; Public listing; Group affiliation; Financial constraints; Internal capital markets (search for similar items in EconPapers)
JEL-codes: G30 G32 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:76:y:2025:i:c:s0275531925000558

DOI: 10.1016/j.ribaf.2025.102799

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