An empirical analysis of the impact of trade credit on bank debt restructuring

Antonio Fabio Forgione () and Carlo Migliardo
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Antonio Fabio Forgione: University of Messina

Economia Politica: Journal of Analytical and Institutional Economics, 2019, vol. 36, issue 2, No 4, 415-438

Abstract: Abstract This paper analyzes the relationship between the likelihood that Italian firms implement bank debt restructuring and the trade credit. It uses a sample of 2377 Italian firms over the period of 2010–2014. The empirical analysis shows that the amount of payables and the unexpected delay in the payment of trade credit are strictly related to the firm’s financial distress. Specifically, the findings suggest that companies in financial distress have used trade credit extensively and suffer from the deferment of receivables. This result supports the hypothesis of a potential credit contagion channel in the supply chain with a cascading effect between buyers and suppliers.

Keywords: Bank lending; Corporate distress; Panel logit model; Trade credit (search for similar items in EconPapers)
JEL-codes: C23 C53 D92 G21 G33 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s40888-018-0110-x

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