Access to public capital markets and the extension of trade credit: An empirical analysis of Korean public and private firms

Hyun Joong Im and Byung-Uk Chong

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

Abstract: Using a large dataset of Korean public and private firms, we show that public listing does not influence the supply of trade credit among firms affiliated with a large business group (chaebol). Meanwhile, non-affiliated public firms provide more trade credit to customers than their private counterparts. Public listing allows non-affiliated firms to have greater access to cheaper sources of external capital, thereby increasing the supply of trade credit. However, the results for chaebol-affiliated firms may be attributed to well-functioning internal capital markets. Our results shed light on the substitution between internal and external capital markets.

Keywords: Trade credit; Public listing; Business group affiliation; Public firms; Private firms (search for similar items in EconPapers)
JEL-codes: G30 G32 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:46:y:2022:i:pb:s154461232100461x

DOI: 10.1016/j.frl.2021.102484

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