Business, Management and Accounting
8 years ago

Small Firms Benefit from Trade Credit Discounts, Boosting Financial Stability

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SSRN Electronic Journal
Additional Evidence on the Use of Trade Credit by Small Firms: The Role of Trade Credit Discounts
Morris G. Danielson, Jonathan Scott

Paper Summary

Small firms often use trade credit to manage their finances. A study looked at how trade credit discounts affect small businesses. They found that firms offering discounts tend to have lower credit risk and higher profitability. This suggests that trade credit discounts play a crucial role in the financial health of small businesses.

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