The Determinants of Trade Credit During and After the 2008 International Financial Crisis

Carlos Carreira () and Pedro Silva ()
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Pedro Silva: Univ Coimbra, CeBER, Faculty of Economics

Notas Económicas, 2023, issue 56, 90-110

Abstract: This work analyses the determinants of trade credit granted and received and the effect of the 2008 financial crisis on it. Using a sample of 96,417 Portuguese SMEs from the non-financial sector for the period 2010–2019, we found that trade credit plays an important role in firms' financing policies. Firms with better access to the credit market act as financial intermediaries and grant financing to firms that have difficulty accessing credit. Moreover, the use of trade credit seems to be a substitute for bank financing. We also found that firms use trade credit as a marketing tool to increase their sales. Finally, we found a slump in credit granted to customers after the 2008 financial crisis, which seems to mimic the contraction in aggregate bank credit.

Keywords: Trade Credit; SMEs; Financing; Commercial policy. (search for similar items in EconPapers)
JEL-codes: G01 G32 L29 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:gmf:journl:y:2023:i:56:p:90:110

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