Firms' resilience to financial constraints: The role of trade credit

Isaac Marcelin, Daniel Brink and Wei Sun

No wp-2021-78, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: We study the role of trade credit in enhancing the resilience of financially constrained firms from 2010 to 2017. Implicit borrowing in trade finance allows financially constrained firms to bridge the financing gap, expand employment by 8.26 per cent, and increase average firm profits significantly. Trade finance suppliers, not financially constrained firms, experience a surge of 7.99 per cent in the average rate of sales growth.

Keywords: Financial constraints; trade credit; Employment; Growth; Profitability; Corporate finance; Resilience (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-bec, nep-cfn and nep-fdg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.wider.unu.edu/sites/default/files/Publ ... -of-trade-credit.pdf (application/pdf)

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:unu:wpaper:wp-2021-78

Access Statistics for this paper

More papers in WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER) Contact information at EDIRC.
Bibliographic data for series maintained by Siméon Rapin ().