Interenterprise Credit and Adjustment during Financial Crises: The Role of Firm Size

Fabrizio Coricelli and Marco Frigerio

Journal of Money, Credit and Banking, 2019, vol. 51, issue 6, 1547-1580

Abstract: Small and medium‐sized enterprises (SMEs) suffered a sharp contraction in their borrowing from banks during the Great Recession. Analyzing a large firm‐level database for European countries, the paper shows that trade credit amplified the liquidity squeeze on SMEs, with adverse effects on their real activity. SMEs sharply increased their net trade credit and thus transferred financial resources to larger firms. Given the large weight of SMEs in the economy of European countries, the liquidity squeeze of SMEs likely contributed to the depth of the output fall and the slow recovery in Europe during the Great Recession.

Date: 2019
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Citations: View citations in EconPapers (6)

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https://doi.org/10.1111/jmcb.12557

Related works:
Working Paper: Interenterprise Credit and Adjustment during Financial Crises: The Role of Firm Size (2019)
Working Paper: Interenterprise Credit and Adjustment during Financial Crises: The Role of Firm Size (2019)
Working Paper: Inter-Enterprise Credit and Adjustment During Financial Crises: The Role of Firm Size (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:51:y:2019:i:6:p:1547-1580

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