Why do firms extend trade credit? The role of inventories

Filipa Da Silva Fernandes, Alessandra Guariglia, Alexandros Kontonikas and Serafeim Tsoukas

International Journal of Finance & Economics, 2025, vol. 30, issue 2, 1785-1802

Abstract: We are the first to explore the role of inventories as a trade credit driver in an economic/financial crisis setting. To this end, we make use of a panel of 198,024 manufacturing firms from eleven euro‐area countries over the period 2006–2022. We find an inverse relationship between the stock of inventories and trade credit extended, which is magnified during the recent sovereign debt crisis. These results are robust to using different definitions of trade credit extended and of the crisis. Furthermore, we find that the association between inventories and trade credit extended is driven by financially constrained firms and firms producing differentiated products.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/ijfe.2975

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:ijfiec:v:30:y:2025:i:2:p:1785-1802

Ordering information: This journal article can be ordered from
http://jws-edcv.wile ... PRINT_ISSN=1076-9307

Access Statistics for this article

International Journal of Finance & Economics is currently edited by Mark P. Taylor, Keith Cuthbertson and Michael P. Dooley

More articles in International Journal of Finance & Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().