Trade credit and industry dynamics: evidence from trucking firms

• Autores: Jean Noel Barrot
• Localización: The Journal of finance, ISSN 0022-1082, Vol. 71, Nº 5, 2016, págs. 1975-2016
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Resumen

  • 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.