Resumen de Supplier financing and earnings quality

Pedro Juan García Teruel, Pedro Martínez Solano, Juan Pedro Sánchez Ballesta

• In this paper we investigate the effect of earnings quality on supplier credit in a sample of small and medium-sized firms. After controlling for other determinants of trade credit, we show that firms whose earnings present lower variability, higher smoothing and predictability, and higher accruals quality have access to more trade credit from suppliers. This association suggests that earnings attributes associated to lower volatility and higher precision with respect to cash flows facilitate access to trade credit.