Business, Management and Accounting
4 years ago

New research reveals how trade credit impacts corporate inventories and finances

RePEc: Research Papers in Economics
Corporate trade credit and inventories: New evidence of a tradeoff from accounts payable and receivable
Simona Mateut, Spiros Bougheas, Paul Mizen

Paper Summary

Trade credit is a common way for companies to finance their operations. This study looks at how trade credit is related to inventories. The researchers found that changes in inventory costs, profitability, risk, and liquidity affect how much trade credit companies offer and receive. This influence happens through a production channel. The results of the study support this model and add to what we already know about trade credit.

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