Trade Credit and Industry Dynamics: Evidence from Trucking Firms
Name
Barrot_Trade credit.pdf
Size
243.47 KB
Format
Adobe PDF
Checksum (MD5)
5582fcd9ae2a95d4a7cac8b36b58afa9
Author(s)
Barrot, Jean-Noel
Date Issued
October 2015
Journal
The Journal of Finance
Publisher
Wiley Blackwell
Citation
BARROT, JEAN-NOËL. “Trade Credit and Industry Dynamics: Evidence from Trucking Firms.” The Journal of Finance 71, no. 5 (September 2016): 1975–2016.
Version
Original manuscript
Abstract
Long payment terms are a strong impediment to the entry and survival of liquidity-constrained firms. To test this idea and its implications, I consider the effect of a reform restricting the trade credit supply of French trucking firms. In a difference-in-differences setting, I find that trucking firms' corporate default probability decreases by 25% following the restriction. The effect is persistent, concentrated among liquidity-constrained firms, and not offset by a decrease in profits. The restriction also triggers an increase in the entry of small trucking firms.
MIT Department
Sloan School of Management
Terms of Use
Creative Commons Attribution-Noncommercial-Share Alike
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1111/jofi.12371
