اعتبار تجاری شرکت های بزرگ و موجودی: شواهد جدید از مبادله حساب های قابل پرداخت و قابل دریافت
|کد مقاله||سال انتشار||تعداد صفحات مقاله انگلیسی||ترجمه فارسی|
|20514||2009||9 صفحه PDF||سفارش دهید|
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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of Banking & Finance, Volume 33, Issue 2, February 2009, Pages 300–307
Trade credit is an important source of finance for firms and has been well researched, but the focus has been on financial trade-offs. In this paper, we consider the trade-offs with inventories and develop a simple model that recognizes the incentives a firm faces to offer and receive trade credit. Our model identifies the response of accounts payable and accounts receivable to changes in the cost of inventories, profitability, risk and liquidity, and importantly, this influence operates through a production channel. Our results support the model and complement many existing studies focused on explaining the financial terms of trade credit.
Trade credit is a major element of corporate finance. Rajan and Zingales (1995) document that the volume of trade credit in aggregate was a significant part (17.8%) of total assets for all American firms in the early 1990s. In Germany, France and Italy, trade credit represents more than a quarter of total corporate assets, while in the United Kingdom 70% of total short-term debt (credit extended) and 55% of total credit received by firms is made up of trade credit (Kohler et al., 2000 and Guariglia and Mateut, 2006). Trade credit is also important in emerging economies, like China, where firms get limited support from the banking system (Ge and Qiu, 2007). Accordingly, trade credit has been thoroughly researched but the research has focused mainly on the financial substitutes and complements to trade credit by asking what is the advantage of obtaining credit directly from sellers compared to other (often cheaper) forms of credit such as bank loans. Atanasova and Wilson (2004) find that to avoid bank credit rationing, smaller UK companies increase their reliance on inter-firm credit and Guariglia and Mateut (2006) suggest the uptake of trade credit weakens the credit channel as firms substitute trade finance for bank loans when monetary policy tightens. The literature provides many possible explanations for uptake or offer of trade credit based on informational asymmetries (Smith, 1987 and Biais and Gollier, 1997), discrimination arguments (Brennan et al., 1988), monitoring advantages (Jain, 2001 and Mateut et al., 2006), insurance (Cunat, 2007), product quality (Lee and Stove, 1993 and Long et al., 1993), bankruptcy (Frank and Maksimovic, 2005 and Wilner, 2000), opportunistic behavior (Burkart and Ellingsen, 2004) and externalities (Daripa and Nilsen, 2005). Empirical studies explore the relationships between accounts payable and accounts receivable and other balance sheet variables to corroborate or refute these theories and examine in detail the terms and conditions of trade credit.1 These are mostly financial theories of trade credit. Economists have become accustomed to considering separately transactions that involve the exchange of goods from those that involve financial transactions. The separation is motivated by the benefits obtained from skill specialization: financially constrained buyers obtain funds in financial markets which they then use to buy goods from sellers in goods markets. But the trade credit bridges goods and financial markets, and there is more to that bridge than the comparison of the relative costs of alternative forms of finance to firms or the terms of trade credit agreements. We argue that fresh motivation can be found for the study of trade credit based on the advantage to the seller in inventory management from offering trade credit to the buyer. The advantage is that the seller, who faces an uncertain demand for the product, may extend trade credit to financially constrained customers in order to obtain credit-financed sales rather than accumulate costly inventories of finished goods, which may or may not be sold for cash in the next period. This trade-off that the firm faces between inventories and trade credit is the focus of this paper. Our approach provides a theoretical two-period stochastic demand model of firm behavior. Firms produce goods for sale, hold inventories of goods that were produced but unsold at a cost, and, critically, offer and receive trade credit in the middle of a credit chain. Therefore, producers facing an uncertain demand for their products face an incentive to extend trade credit to their financially constrained customers in order to promote sales rather than accumulate costly inventories of finished goods. This incentive is limited only by the need to obtain liquidity to meet their own obligations, producers might readily offer trade credit on appropriate terms to enhance cash sales and boost demand. This trade-off has not previously been explored in the economics literature.2 We view the analysis of the trade-off between inventories and trade credit as complementary to theories that address financial aspects of trade credit. Some early work on trade credit following a transactions costs approach has analyzed the trade-offs between the costs of financial transactions and the costs related to the exchange of goods (see, for example, Nadiri, 1969, Schwartz, 1974, Ferris, 1981 and Emery, 1987). Only Emery (1987) considers explicitly the trade-off between trade credit and inventories but does so within a deterministic variable demand framework. More recently, Daripa and Nilsen (2005) have theoretically examined how this trade-off influences the terms of trade credit agreements. In their model suppliers offer trade credit as an incentive to buyers to hold higher inventories – shifting inventories from seller to buyer. The underlying rationale for trade credit has some similarities with ours when we consider a firm that lies in the middle of a credit chain, since suppliers reduce inventories by offering trade credit and firms that accept trade credit from their suppliers and thus increase their inventories are also in the position to offer trade credit to their own customers. In fact, the predictions of their model with respect to the effects of changes in inventories and profit margins on the levels of trade credit are the same as ours. Our stylized model that provides directly testable predictions on the response of accounts payable and accounts receivable to changes in the cost of inventories, profitability, risk and liquidity, which operate by influencing production. Even the influence of bank loans on trade credit operates by allowing greater production, inventories and sales, financed in part through credit. Our contribution empirically is to directly test the predictions of our model using GMM estimates in first-differences on an unbalanced panel of UK firms drawn from FAME that includes larger FTSE-quoted firms and those on the smaller AIM/OFEX exchange, as well as unquoted firms.3 The results show a direct influence of inventories on accounts receivable but a negligible effect on accounts payable even after controlling for firms characteristics such as liquidity, profitability and risk, and allowing for scale of bank borrowing. The effect of inventories on trade credit is dependent on firm size, as inventory holding costs fall with size. These results have not been published before and provide evidence in favour of an inventory management motive for offering trade credit. In the following section, we develop a simple model that captures the trade-off between trade credit and inventory under stochastic demand. In Section 3, we present our empirical work and in the final section we conclude.
نتیجه گیری انگلیسی
We develop a simple theoretical model with a stochastic demand framework that captures the trade-off between inventories and trade credit. The essential elements are that the firm is in the middle of a credit chain, and produces goods for sale, holds inventories of goods that were produced but unsold at a cost and in the face of uncertain demand for its products extends trade credit to its financially constrained customers to obtain additional sales. Our model provides directly testable predictions to identify the response of accounts payable and accounts receivable to changes in the cost of inventories, profitability, risk and liquidity, and importantly, this influence operates through a production channel. Even the influence of bank loans on trade credit operates by allowing greater production, inventories and ultimately sales financed in part through credit. We directly test the predictions of our model using GMM estimates in first-differences on an unbalanced panel of UK firms drawn from FAME that includes larger FTSE-quoted firms and those on the smaller AIM/OFEX exchange, as well as unquoted firms. Our results support the model suggesting that there is an inventory channel of trade credit, complement many existing studies focusing on the financial terms of trade credit.