Bank credit and corporate working capital management

Chongyang Chen and Robert Kieschnick

Journal of Corporate Finance, 2018, vol. 48, issue C, 579-596

Abstract: We investigate how changes in the availability of bank credit influence how public firms manage their working capital, which is essential to their operations. In doing so, we provide an enhanced understanding of what significantly influences corporate working capital management. We find that changes in the availability of bank credit significantly influence a number of aspects of a firm's working capital policies, and these effects often differ across firms that are more or less dependent on bank financing. Interestingly, our evidence points to the importance of the changing mix of U.S. companies for working capital practices.

Keywords: Bank credit; Working capital management; Cash management; Inventory management; Trade credit; Supply chain financing (search for similar items in EconPapers)
JEL-codes: G21 G28 G32 O16 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:48:y:2018:i:c:p:579-596

DOI: 10.1016/j.jcorpfin.2017.12.013

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