Trade Credit and the Transmission of Unconventional Monetary Policy

Manuel Adelino, Miguel Ferreira (), Mariassunta Giannetti and Pedro Pires

No 27077, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We show that trade credit in production networks is important for the transmission of unconventional monetary policy. We find that firms with bonds eligible for purchase under the European Central Bank’s Corporate Sector Purchase Program act as financial intermediaries and extend more trade credit to their customers. The increase in trade credit flows is more pronounced from core countries to periphery countries and towards financially constrained customers. Customers increase investment and employment in response to the additional financing, while suppliers with eligible bonds increase their customer base, potentially favoring upstream industry concentration. Our findings suggest that the trade credit channel of monetary policy produces heterogeneous effects on regions, industries, and firms.

JEL-codes: E50 G30 (search for similar items in EconPapers)
Date: 2020-05
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
Note: CF ME
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Citations: View citations in EconPapers (13)

Published as Manuel Adelino & Miguel A Ferreira & Mariassunta Giannetti & Pedro Pires, 2023. "Trade Credit and the Transmission of Unconventional Monetary Policy," The Review of Financial Studies, vol 36(2), pages 775-813.

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Related works:
Journal Article: Trade Credit and the Transmission of Unconventional Monetary Policy (2023)
Working Paper: Trade credit and the transmission of unconventional monetary policy (2022)
Working Paper: Trade Credit and the Transmission of Unconventional Monetary Policy (2020)
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