Credit chains and sectoral comovemen t: does the use of trade credit amplify sectoral shocks ?
No 4525, Policy Research Working Paper Series from The World Bank
This paper provides evidence of the presence and relevance of a credit-chain amplification mechanism by looking at its implications for the correlation of industries. In particular, it tests the hypothesis that an increase in the use of trade-credit along the input-output chain linking two industries results in an increase in their correlation. The analysis uses detailed data on the correlations and input-output relations of 378 manufacturing industry-pairs across 44 countries with different degrees of use of trade credit. The results provide strong support for this hypothesis and indicate that the mechanism is quantitatively relevant.
Keywords: Economic Theory&Research; Access to Finance; Bankruptcy and Resolution of Financial Distress; Investment and Investment Climate (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
References: Add references at CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
http://www-wds.worldbank.org/external/default/WDSC ... ered/PDF/wps4525.pdf (application/pdf)
Journal Article: Credit Chains and Sectoral Comovement: Does the Use of Trade Credit Amplify Sectoral Shocks? (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:4525
Access Statistics for this paper
More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().