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Does trade credit play a signalling role? Some evidence from SMEs microdata

Small business economics, 2014-01, Vol.42 (1), p.131-151 [Peer Reviewed Journal]

Springer Science+Business Media 2014 ;Springer Science+Business Media New York 2013 ;Springer Science+Business Media New York 2014 ;ISSN: 0921-898X ;EISSN: 1573-0913 ;DOI: 10.1007/s11187-013-9478-8

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Title:
Does trade credit play a signalling role? Some evidence from SMEs microdata
Author: Agostino, Mariarosaria ; Trivieri, Francesco
Subjects: Accounting ; Adverse selection ; Bank assets ; Bank credit ; Bank loans ; Banks ; Business and Management ; Business structures ; Commercial banks ; Commercial credit ; Credit ; Customers ; Debt ; Default ; Econometrics ; Economic relations ; Empirical evidence ; Entrepreneurship ; Finance ; Funding ; Hypotheses ; Industrial Organization ; Loans ; Management ; Microeconomics ; Research methodology ; Signalling ; Small & medium sized enterprises-SME ; Small and medium sized enterprises ; Studies ; Trade credit ; Trade finance
Is Part Of: Small business economics, 2014-01, Vol.42 (1), p.131-151
Description: Using micro-data on small- and mediumsized enterprises, this paper empirically investigates the "signalling hypothesis" formulated on the role of trade credit (Biais and Gollier in Rev Financ Stud 10: 903-937, 1997; Burkart and Ellingsen in Am Econ Rev 94: 569-590, 2004). The research method adopted allows evaluation of the impact of suppliers' credit on bank debt accounting for the strength (duration) of bank-firm relationships. Our main finding is that trade credit seems to have an information content for banks, especially when the latter do not dispose of adequate (soft) information on firms, which is likely the case at the beginning stages of bank-firm relationships. An implication of our results is that the availability of suppliers credit might be crucial to foster access to institutional funding for new firms entering the market. Our evidence also suggests that banks seem to consider suppliers a reliable source of information on firms' financial conditions even after several years of lending relationships.
Publisher: Boston: Springer
Language: English
Identifier: ISSN: 0921-898X
EISSN: 1573-0913
DOI: 10.1007/s11187-013-9478-8
Source: Alma/SFX Local Collection
ProQuest Central

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Does trade credit play a signalling role? Some evidence from SMEs microdata

Springer Science+Business Media 2014 ;Springer Science+Business Media New York 2013 ;Springer Science+Business Media New York 2014 ;ISSN: 0921-898X ;EISSN: 1573-0913 ;DOI: 10.1007/s11187-013-9478-8

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