Curbing Shocks to Corporate Liquidity
The Role of Trade Credit
Bibliographic Data
| ID | 10176336 |
|---|---|
| Authors | Niklas Amberg (Swedish National Bank), Tor Jacobson (Swedish National Bank), Erik von Schedvin (Centre for Economic Policy Research), Robert M Townsend (0000-0002-7992-6775, Massachusetts Institute of Technology), Robert Townsend |
| Year | 2020 |
| Volume | 129 |
| Issue | 1 |
| Pages | 182-242 |
| Publication date | 2020-08-28 |
| Open Access | No |
| Type | ARTICLE |
| Venue | Journal of Political Economy (JOURNAL) |
| Journal identifiers | ISSN: 0022-3808 • E-ISSN: 1537-534X |
| Publisher | University of Chicago Press (PUBLISHER • US) |
| DOI | 10.1086/711403 |
| OpenAlex | W3112074279 |
| Language | EN |
| Citations received | 2 |
| References cited | 33 |
Using data on liquidity shortfalls generated by the fraud and failure of a cash-in-transit firm, we demonstrate effects on firms’ trade credit usage. We find that firms manage liquidity shortages by increasing the amount of credit drawn from suppliers and decreasing the amount issued to customers. The compounded trade credit adjustments are on average of similar magnitude as corresponding adjustments in cash holdings, suggesting that trade credit positions are economically important sources of reserve liquidity for firms. The underlying mechanism in trade credit adjustments is in part due to shifts in overdue payments
Business · Cash · Credit crunch · Economic shortage · Economics · Financial system · Liquidity crisis · Market liquidity · Monetary economics · Payment · Trade Credit · Corporate Finance and Governance · Finance · Firm Innovation and Growth · Working Capital and Financial Performance
Trade Credit
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| Citations per year | 1 |
|---|---|
| Citation span | 2024 - 2025 (2) |
| Highly cited | No |