Trade Credit or Bank Credit? – Lessons Learned from Hungarian Firms between 2010 and 2015

Dániel Havran (), Péter Kerényi and Attila Víg

Financial and Economic Review, 2017, vol. 16, issue 4, 86-121

Abstract: This paper addresses the way in which trade credit was used by Hungarian firms in the period between 2010 and 2015. Relying on Burkart and Ellingsen’s (2004) theory of trade credit, we use panel data on 14,554 Hungarian firms (including 68 large corporations) to estimate the relationship of trade credit and short-term bank credit. Estimated on sub-samples broken down by profitability, our results only confirm a complementary relationship. We also examine the relationship separately for each category of firm size. We found a complementary relationship for small and microenterprises, whereas the results obtained for large corporations imply a substitution effect. In Hungary, in the period after 2013 accounts payable tended to be increased by financially constrained micro and medium-sized enterprises and mostly held steady by financially unconstrained firms.

Keywords: trade credit; financial constraints (search for similar items in EconPapers)
JEL-codes: C23 G32 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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