 Customer relationships and the provision of trade credit during a recessionApplied Financial Economics, 2013, vol. 23, issue 12, 1017-1031 Abstract: Having a close relationship with a customer that accounts for a relatively high proportion of sales may be costly for small suppliers and weaken their bargaining power. Suppliers with a weak bargaining position may then find it difficult to reduce their provision of trade credit during a recession despite the need to do so. Employing Japanese small business data, we conclude that close customer relationships are in fact beneficial (not costly) for small suppliers in trade credit contracts. First, we find that small suppliers tend to offer less trade credit during a recession, even if the supplier--customer relationship is close. Second, notwithstanding a close supplier--customer relationship, we find that small suppliers offer less trade credit to their main customers if the supplier is in financial distress or charged higher interest rates by banks. Date: 2013 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:apfiec:v:23:y:2013:i:12:p:1017-1031 Ordering information: This journal article can be ordered from DOI: 10.1080/09603107.2013.791016 Access Statistics for this article Applied Financial Economics is currently edited by Anita Phillips More articles in Applied Financial Economics from Taylor & Francis Journals |
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