اعتبار تجاری، وام دهی بانک ها و انتقال سیاست پولی

This paper investigates the role of trade credit in the transmission of monetary policy. Most models of the transmission mechanism allow firms to access only financial markets or bank lending according to some net worth criterion. In our model we consider external finance from trade credit as an additional source of funding for firms that cannot obtain credit from banks. We predict that when monetary policy tightens there will be a reduction in bank lending relative to trade credit. This is confirmed with an empirical investigation of 16,000 UK manufacturing firms.

Recent research has ensured that market imperfections have a central place in the transmission of monetary policy through the credit channel. When there is imperfect information, alternative types of credit cannot be regarded as perfect substitutes and hence the choice of external finance on the part of firms, and the availability and price of external funds offered by financial intermediaries will depend on factors related to the strength of firms’ balance sheets. This approach to the monetary policy transmission is known as the broad credit channel view, extensively surveyed in Gertler (1988), Hubbard (1995) and Kashyap and Stein (1994). Some firms with characteristics that prevent effective access to alternative markets for funds such as corporate paper or bond markets may be particularly dependent on bank finance and this gives rise to the bank lending channel. It has been a characteristic of this literature to think of market finance and bank finance as the two available external finance options. For example theoretical research has been developed to allow bank lending and a capital market to co-exist even though the former is more expensive (see Diamond, 1991, Besanko and Kanatas, 1993, Hoshi et al., 1993, Holmstrom and Tirole, 1997, Bolton and Freixas, 2000 and Repullo and Suarez, 2000). In these papers, capital market imperfections mean that access is denied to the capital market for firms with a weak financial position. These models predict that periods of monetary tightening will mostly affect financially weak firms (usually small firms) by restricting their access to bank loans and will cause a proportionate decline in aggregate investment, which has been corroborated using disaggregated data in Gertler and Gilchrist (1994) and Oliner and Rudebush (1996). In this paper, we consider another important source of external finance for firms, namely trade credit. According to a Federal Reserve Board Study by Elliehausen and Wolken (1993) trade credit represents about 20% of non-bank non-farm businesses’ liabilities, and up to 35% of total assets. A later study by Rajan and Zingales (1995) calculated that trade credit represented 17.8% of total assets for all American firms in 1991. In many other countries, such as Germany, France and Italy, trade credit represents more than a quarter of total corporate assets. And in the United Kingdom 70% of total short-term debt (credit extended) and 55% of total credit received by firms comprised trade credit (Kohler et al., 2000). Eighty per cent of all firms use trade credit according to a review by Atanasova and Wilson (2002), and the scale of trade credit usage is much increased during periods of monetary contractions. Meltzer (1960) was the first to suggest that a trade credit channel might be a substitute for the bank lending channel, but from a theoretical point of view the implications of trade credit for the broad credit channel view have not yet been explored. Existing theoretical works are mostly concerned with explaining the use of trade credit. For example, Ferris (1981) and Schwartz (1974) have suggested that trade credit provides transactions services to firms, and Cunat (2003) demonstrates that, in the context of limited enforceability of debts, firms may use both trade credit and bank credit when the supplier and the buyer engage in specific production processes. Other papers have explained why trade credit is extended at all. Jain (2001) argues that non-financial firms extend credit to their customers as intermediaries between banks and the ultimate buyers. This supports the conjecture of Biais and Gollier (1997) that the seller's provision of trade credit can provide a valuable signal to the banker that the buyer is worthy of credit, thus mitigating credit rationing. However, these papers do not explain what the consequences might be for corporate finance and monetary policy making if firms take up trade credit when other funds are inaccessible and this puts them at odds with the small empirical literature that attempts to address this question (cf. Nilsen, 2002 and Kohler et al., 2000). In this paper, we tie in a theoretical model with the existing empirical evidence. In our theoretical model we incorporate trade credit and bank loans into a framework that has some similarities with Repullo and Suarez (2000). The existence of imperfections in the credit market means that firms have access to different sources of external funding according to their initial wealth level (although firm size and project size are allowed to differ). We begin by allowing firms to access bank finance only, and find that wealthier firms borrow from banks while lower wealth firms fail to obtain any funding for their projects. When we introduce trade credit, firms with intermediate wealth can find funding for their projects by accepting trade credit. Thus instead of a monetary contraction resulting in some firms being refused credit altogether as in the simple version of our model and in that of Repullo and Suarez (2000), we find monetary tightening brings about a reduction in bank loans but trade credit allows some firms to pursue their projects. As a result trade credit can smooth out the impact of tightening monetary policy. In the final section of the paper we test the predictions of our model against data from a panel of 16,000 UK manufacturing firms finding results that are consistent with the theoretical model. The rest of the paper is organized as follows. Section 2 presents the general theoretical model without trade credit. Section 3 brings in trade credit and describes the new distribution of firms over the two credit sources. Section 4 analyzes the impact of a monetary policy tightening in both settings. Section 5 considers the impact of firm size on credit access, while Section 6 allows for variable project size. Sections 7 and 8 present the predictions of the model and provide some empirical evidence that supports the theoretical predictions of the paper. Finally, Section 9 concludes.

The paper analyzes the channel of monetary policy transmission when trade credit is included among the sources of external finance. Due to imperfections in the credit market, banks observe firms’ returns at a cost and, therefore, charge their clients higher interest rates proportional to the amount that they lend. Since sellers have an information advantage over banks, they may have incentives to ameliorate credit conditions for borrowers and at the same time increase their profits. The credit market equilibrium in our model is characterized by high wealth firms borrowing from banks, intermediate wealth level firms taking trade credit, and low wealth level firms not running their projects. In this framework, we examine the consequences of a monetary policy change. We predict that a monetary tightening causes two main results: (a) a decrease in bank loans relative to trade credit if the outflows of firms seeking funds at the lower end of the wealth spectrum exceeds the inflows from the upper end; (b) a flight-to-quality effect for bank borrowers. The results are consistent with the existing empirical literature that has identified a wider use of trade credit over periods of monetary tightening. When we examine the evidence using panel data from 16,000 manufacturing firms in the UK we find that all our predictions are upheld. Bank loans decline in absolute and relative terms and trade credit increases. When we separate small firms from medium and large firms, and compare the responses over tight and loose monetary policy we find that it is the small (financially weaker firms) that are excluded from bank loans and these firms resort to trade credit. This is the case even when we take into account the effects of solvency, age, credit rating, sales and demand side effects. The magnitudes of the responses of small firms are many multiples of the responses of medium and large firms, which show practically identical responses. This suggests that the cut-off for bank loans (when asset levels are used to proxy firm size) occurs somewhere between the small and medium firm size. The model suggests that financially constrained firms that are excluded from bank loans can still receive credit from other firms. This implies that the influence of a given increase in interest rates should have a more muted effect than if there is no alternative to bank finance. The existence of trade credit weakens the influence of the credit channel to some degree, although it is more expensive than bank loans and is typically only held for the short term.