Ekonomik Daralma Dönemlerinde Likidite Kıtlığı ve Ticari Borç Yönetimi
Trade Credit Policies and Shortage of Liquidity in Cycles of Economic Contraction
Author(s): Bahadir KarakocSubject(s): Economy, Financial Markets
Published by: Adem Anbar
Keywords: Trade Credit; Economic Contraction; Cash Management; Alternative Financing Instruments;
Summary/Abstract: This study examines the trade credit practices of 11.000 publicly listed firms from 17 countries (9 developed and 8 developing). The results indicate that firms with a lack of short-term liquidity receive more trade credit for a longer duration. It becomes even more pronounced in times of economic contraction. For robustness, both the period of the 2008 financial crisis and a contractionary period are scrutinized. A slowdown in the economy creates opposing effects on firms from developed and developing countries, while the former use less credit for a shorter period; the latter receive more credit for a longer period of time, whereas firms with a shortage of liquidity behave similarly, i.e., they increase the amount and the duration of trade credit. The findings suggest that firms with a lack of liquidity survive troubling times by obtaining more trade credit from their suppliers.
Journal: Business and Economics Research Journal
- Issue Year: 12/2021
- Issue No: 1
- Page Range: 127-144
- Page Count: 18
- Language: Turkish