Trade Credit : The Interaction of Financing , Operations , Marketing and Risk Management ∗
نویسندگان
چکیده
This paper builds a comprehensive model that treats trade credit as the interaction of financing, operations, marketing and default-risk management. Our model is featured by using a two-stage lottery method to describe default risk, in the context of which the incentive-compatible model is formulated. We find that the capital cost of the supplier is the most important factor determining the credit term. Default risk acts like a filtering criterion for selecting retailers eligible for credit. Empirical evidence supporting our theoretical considerations is obtained by estimating three panel econometric models, using a dataset of manufacturing companies drawn from COMPUSTAT database.
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