The financial and operational impacts of European SMEs’ use of trade credit as a substitute for bank credit

References

• Abdulla, Y., V. A. Dang, and A. Khurshed. 2017. “Stock Market Listing and the Use of Trade Credit: Evidence from Public and Private Firms.” Journal of Corporate Finance 46: 391–410.
   Web of Science ®Google Scholar
• Abuhommous, A. 2017. The Impact of Offering Trade Credit on Firms’ Profitability.” The Journal of Corporate Accounting & Finance 28 (6): 29–40.
   Web of Science ®Google Scholar
• ACCA (the Association of Chartered Certified Accountants). 2019. “Types of Finance”. Available from ACCA global website: https://accaglobal.com.
   Google Scholar
• Agostino, M., and F. Trivieri. 2019. “Does Trade Credit Affect Technical Efficiency? Empirical Evidence from Italian Manufacturing SMEs.” Journal of Small Business Management 57 (2): 576–592.
   Web of Science ®Google Scholar
• Altman, E. I., and G. Sabato. 2007. “Modelling Credit Risk for SMEs: Evidence from the U.S. Market.” Abacus 43 (3): 332–357.
   Web of Science ®Google Scholar
• Andrieu, G., R. Stagliano, and P. v. d. Zwan. 2018. “Bank Debt and Trade Credit for SMEs in Europe: Firm-, Industry-, and Country-level Determinants.” Small Business Economics 51 (1): 245–264.
   Web of Science ®Google Scholar
• Arellano, M., and S. Bond. 1991. “Some Tests of Specification for Panel Data: Mont Carlo Evidence and an Application to Employment Equations.” Review of Economic Studies 58 (2): 277–297.
   Web of Science ®Google Scholar
• Arellano, M., and O. Bover. 1995. “Another Look at the Instrumental Variable Estimation of Error-Components Models.” Journal of Econometrics 68: 29–51.
   Web of Science ®Google Scholar
• Atkas, N., E. de Bodt, F. Lobez, and J. Statnik. 2012. “The Information Content of Trade Credit.” Journal of Banking & Finance 36: 1402–1413.
   Web of Science ®Google Scholar
• Ayyagari, M., A. Demirguc-Kunt, and V. Maksimovic. 2011. “Firm Innovation in Emerging Markets: The Role of Finance, Governance, and Competition.” Journal of Financial and Quantitative Analysis 46 (6): 1545–1580.
   Web of Science ®Google Scholar
• Banos-Caballero, S., P. J. Garcia-Teruel, and P. Martinez-Solano. 2012. “How Does Working Capital Management Affect the Profitability of Spanish SMEs?” Small Business Economics 39: 517–529.
   Web of Science ®Google Scholar
• Barrot, J. N. 2016. “Trade Credit and Industry Dynamics: Evidence from Trucking Firms.” Journal of Finance 71 (5): 1975–2016.
   Web of Science ®Google Scholar
• Baum, C. F. 2006. “An Introduction to Modern Econometrics Using Stata.” StataCorp. ISBN-10: 1-59718-013-0.
   Google Scholar
• Bazzana, F., G. De Laurentis, R. Pisani, and R. T. Colonel. 2019. “Can Domestic Trade Credit Insurance Contracts be Effective Collateral for Banks? A Quantitative Study of the Italian Market.” The European Journal of Finance, doi:10.1080/1351847X.2019.1627377.
   Web of Science ®Google Scholar
• Blundell, R., and S. R. Bond. 1998. “Initial Conditions and Moment Restrictions in Dynamic Panel Data Models.” Journal of Econometrics 87 (1): 115–143.
   Web of Science ®Google Scholar
• Campello, M., and M. Larrain. 2016. “Enlarging the Contracting Space: Collateral Menus, Access to Credit, and Economic Activity.” The Review of Financial Studies 29 (2): 349–383.
   Web of Science ®Google Scholar
• Carbo-Valverde, S., F. Rodriguez-Fernandez, and G. F. Udell. 2016. “Trade Credit, the Financial Crisis, and SME Access to Finance.” Journal of Money, Credit and Banking 48 (1): 113–143.
   Web of Science ®Google Scholar
• Casey, E., and C. M. O’Toole. 2014. “Bank Lending Constraints, Trade Credit and Alternative Financing During the Financial Crisis: Evidence from European SMEs.” Journal of Corporate Finance 27: 173–193.
   Web of Science ®Google Scholar
• Cassia, L., and S. Vismara. 2009. “Firms’ Trade Credit and the Local Level of Development of the Banking System in Europe.” Investment Management and Financial Innovations 6 (4): 46–58.
   Google Scholar
• Cheng, N., and R. Pike. 2003. “The Trade Credit Decision: Evidence of UK Firms.” Managerial and Decision Economics 24 (6/7): 419–438.
   Google Scholar
• Chui, A. C. W., C. C. Y. Kwok, and G. S. Zhou. 2016. “National Culture and the Cost of Debt.” Journal of Banking & Finance 69: 1–19.
   Web of Science ®Google Scholar
• Cunat, V. 2007. “Trade Credit: Suppliers as Debt Collectors and Insurance Providers.” The Review of Financial Studies 20 (2): 491–527.
   Web of Science ®Google Scholar
• Dary, S., and H. James Jr. 2019. “Does Investment in Trade Credit Matter for Profitability? Evidence from Publicly Listed Agro-Food Firms.” Research in International Business and Finance 47: 237–250.
   Web of Science ®Google Scholar
• De Haan, L., and E. Sterken. 2006. “The Impact of Monetary Policy on the Financing Behaviour of Firms in the Euro Area and the UK.” The European Journal of Finance 12 (5): 401–420.
   Google Scholar
• Deloof, M. 2003. “Does Working Capital Management Affect Profitability of Belgian Firms?” Journal of Business Finance & Accounting 30 ((3) & (4)): 573–587.
   Google Scholar
• Deloof, M., and M. L. Rocca. 2015. “Local Financial Development and the Trade Credit Policy of Italian SMEs.” Small Business Economics 44: 905–924.
   Web of Science ®Google Scholar
• Demiroglu, C., C. James, and A. Kizilaslan. 2012. ““Bank Lending Standards and Access to Lines of Credit.” Journal of Money, Credit and Banking 44 (6): 1063–1089.
   Web of Science ®Google Scholar
• De Wit, G., and J. de Kok. 2014. “Do Small Businesses Create More Jobs? New Evidence from Europe.” Small Business Economics 42 (2): 283–295.
   Web of Science ®Google Scholar
• Dittmar, A., and J. Mahrt-Smith. 2007. “Corporate Governance and the Value of Cash Holdings.” Journal of Financial Economics 83 (3): 599–634.
   Web of Science ®Google Scholar
• Emery, G. W. 1984. “A Pure Financial Explanation for Trade Credit.” Journal of Financial and Quantitative Analysis 19 (3): 271–285.
   Web of Science ®Google Scholar
• Emery, G., and N. Nayar. 1998. “Product Quality and Payment Policy.” Review of Quantitative Finance and Accounting 10 (3): 269–284.
   Google Scholar
• European Commission. 2014. “A Partial and Fragile Recovery, Annual Report on European SMEs 2013/2014.” European Commission. https://ec.europa.eu/docsroom/documents/16121/attachments/1/translations/en/renditions/native.
   Google Scholar
• European Commission. 2016. “Insolvencies and SMEs: The Role of Second Chance.” European Commission: Annual Report European SMEs 2015/2016. https://www.ggb.gr/sites/default/files/basic-page-files/2016_Special%20Study%20on%20Second%20Chance.pdf.
   Google Scholar
• European Commission. 2017. “2017 SBA Fact Sheet & Scoreboard.” European Commission. https://ec.europa.eu/docsroom/documents/26562/attachments/1/translations/en/renditions/native.
   Google Scholar
• Fabbri, D., and L. Klapper. 2008. “Market Power and the Matching of Trade Credit Terms.” The World Bank, doi:10.1596/1813-9450-4754.
   Google Scholar
• Ferrando, A., and K. Mulier. 2013. “Do Firms Use the Trade Credit Channel to Manage Growth?” Journal of Banking & Finance 37 (8): 3035–3046.
   Web of Science ®Google Scholar
• Ferris, J. S. 1981. “A Transactions Theory of Trade Credit Use.” The Quarterly Journal of Economics 96 (2): 243–270.
   Web of Science ®Google Scholar
• Fisman, R. 2001. “Trade Credit and Productive Efficiency in Developing Countries.” World Development 29 (2): 311–321.
   Web of Science ®Google Scholar
• Fisman, R., and I. Love. 2003. “Trade Credit, Financial Intermediary Development, and Industry Growth.” The Journal of Finance 58: 353–374.
   Web of Science ®Google Scholar
• Fungacova, Z., A. Shamshur, and L. Weill. 2017. “Does Bank Competition Reduce Cost of Credit? Cross-Country Evidence from Europe.” Journal of Banking & Finance 83: 104–120.
   Web of Science ®Google Scholar
• Garcia-Appendini, E., and J. Montoriol-Garriga. 2013. “Firms as Liquidity Providers: Evidence from the 2007-2008 Financial Crisis.” Journal of Financial Economics 109: 272–291.
   Web of Science ®Google Scholar
• Garcia-Teruel, P. J., and P. Martinez-Solano. 2010. “Determinants of Trade Credit: A Comparative Study of European SMEs.” International Small Business Journal 28 (3): 215–233.
   Web of Science ®Google Scholar
• Giannetti, M., M. Burkart, and T. Ellingsen. 2011. “What You Sell is What You Lend? Explaining Trade Credit Contracts.” The Review of Financial Studies 24 (4): 1261–1298.
   Web of Science ®Google Scholar
• Grau, A., and A. Reig. 2019. “The Industry Effect and the Decision to Integrate Vertically in a Crisis Context.” The European Journal of Finance 25 (16): 1591–1605.
   Web of Science ®Google Scholar
• Guariglia, A., and S. Mateut. 2016. “External Finance and Trade Credit Extension in China: Does Political Affiliation Make a Difference?” The European Journal of Finance 22 (4-6): 319–344.
   Web of Science ®Google Scholar
• Hadlock, C. J., and J. R. Pierce. 2010. “New Evidence on Measuring Financial Constraints: Moving Beyond the KZ Index.” The Review of Financial Studies 23 (5): 1909–1940.
   Web of Science ®Google Scholar
• Han, L., S. Zhang, and F. Greene. 2017. “Bank Market Concentration, Relationship Banking, and Small Business Liquidity.” International Small Business Journal 354: 365–384.
   Google Scholar
• Heim, S., K. Huschelrath, P. Schmidt-Dengler, and M. Strazzeri. 2017. “The Impact of State Aid on the Survival and Financial Viability of Aided Firms.” European Economic Review 100: 193–214.
   Web of Science ®Google Scholar
• Hill, M., G. Kelly, and G. Lockhart. 2012. “Shareholder Returns from Supplying Trade Credit.” Financial Management 41 (1): 255–280.
   Web of Science ®Google Scholar
• Holmstrom, B., and J. Tirole. 1998. “Private and Public Supply of Liquidity.” Journal of Political Economy 106 (1): 1–40.
   Web of Science ®Google Scholar
• Huyghebaert, N., and L. Wang. 2016. “Institutional Development and Financing Decisions: Evidence from a Cross-Regional Study on Chinese Listed Firms.” The European Journal of Finance 22 (4–6): 288–318.
   Web of Science ®Google Scholar
• Jackson, J. E., and A. R. Thomas. 1995. “Bank Structure and New Business Creation, Lessons from an Earlier Time.” Regional Science and Urban Economics 25 (3): 323–353.
   Web of Science ®Google Scholar
• Jain, N. 2001. “Monitoring Costs and Trade Credit.” Quarterly Review of Economics and Finance 41 (1): 89–110.
   Google Scholar
• Kestens, K., P. Cauwenberge, and H. Bauwhede. 2012. “Trade Credit and Company Performance During the 2008 Financial Crisis.” Accounting and Finance 52: 1125–1151.
   Web of Science ®Google Scholar
• Klapper, L., L. Laeven, and R. Raghuram. 2012. “Trade Credit Contracts.” The Review of Financial Studies 25 (3): 838–867.
   Web of Science ®Google Scholar
• Lancaster, T. 2000. “The Incidental Parameter Problem since 1948.” Journal of Econometrics 95 (2): 391–413.
   Web of Science ®Google Scholar
• Leon, F. 2015. “Does Bank Competition Alleviate Credit Constraints in Developing Countries?” Journal of Banking and Finance 57: 130–142.
   Web of Science ®Google Scholar
• Link, J., and H. Mehlum. 2010. “With or Without U? The Appropriate Test for a U-Shaped Relationship.” Oxford Bulletin of Economics and Statistics 72 (1): 109–118.
   Web of Science ®Google Scholar
• Longhofer, S. D., and J. A. C. Santos. 2003. The Paradox of Priority.” Financial Management 31 (1): 69–81.
   Google Scholar
• Love, I., and M. S. M. Peria. 2015. “How Bank Competition Affects Firms’ Access to Finance.” The World Bank Economic Review 29 (3): 413–448.
   Web of Science ®Google Scholar
• Love, I., L. A. Preve, and V. Sarria-Allende. 2007. “Trade Credit and Bank Credit: Evidence from Recent Financial Crises.” Journal of Financial Economics 83 (2): 453–469.
   Web of Science ®Google Scholar
• Marotta, G. 2005. “When Do Trade Credit Discounts Matter? Evidence from Italian Firm-Level Data.” Applied Economics 37 (4): 403–416.
   Web of Science ®Google Scholar
• Martinez-Sola, C., P. J. Garcia-Teruel, and P. Martinez-Solano. 2014. “Trade Credit and SME Profitability.” Small Business Economics 42: 561–577.
   Web of Science ®Google Scholar
• Mulier, K., K. Schoors, and B. Merlevede. 2016. “Investment-Cash Flow Sensitivity and Financial Constraints: Evidence from Unquoted European SMEs.” Journal of Banking & Finance 73: 182–197.
   Web of Science ®Google Scholar
• Ng, C., J. Smith, and R. Smith. 1999. “Evidence on the Determinants of Credit Terms Used in Interfirm Trade.” The Journal of Finance 54 (3): 1109–1129.
   Web of Science ®Google Scholar
• Nilsen, J. H. 2002. “Trade Credit and the Bank Lending Channel.” Journal of Money, Credit and Banking 34 (1): 226–253.
   Web of Science ®Google Scholar
• Norden, L., S. van Kampen, and M. I. Munoz. 2019. “Credit Quality and Substitution in SME Finance.” SSRN id=2578291.
   Google Scholar
• Ogawa, K., E. Sterken, and I. Tokutsu. 2013. “The Trade Credit Channel Revisited: Evidence from Micro Data of Japanese Small Firms.” Small Business Economics 40: 101–118.
   Web of Science ®Google Scholar
• Pais, M., and P. Gama. 2015. “Working Capital Management and SMEs Profitability: Portuguese Evidence.” International Journal of Managerial Finance 11 (3): 341–358.
   Web of Science ®Google Scholar
• Palacin-Sanchez, M. J., F. J. Canto-Cuevas, and F. di-Pietro. 2018. “Trade Credit Versus Bank Credit: A Simultaneous Analysis in European SMEs.” Small Business Economics 53: 1079–1096.
   Web of Science ®Google Scholar
• Paul, S., and R. Boden. 2008. “The Secret Life of UK Trade Credit Supply: Setting a New Research Agenda.” The British Accounting Review 40: 272–281.
   Google Scholar
• Petersen, M. A., and R. G. Rajan. 1997. “Trade Credit: Theories and Evidence.” The Review of Financial Studies 10 (3): 661–691.
   Web of Science ®Google Scholar
• Psillaki, M., and K. Eleftheriou. 2015. “Trade Credit, Bank Credit, and Flight to Quality: Evidence from French SMEs.” Journal of Small Business Management 53 (4): 1219–1240.
   Web of Science ®Google Scholar
• Roodman, D. 2009. “How to Do xtabond2: An Introduction to Difference and System GMM in Stata.” The Stata Journal 9 (1): 86–136.
   Web of Science ®Google Scholar
• Ruckes, M. 2004. “Bank Competition and Credit Standards.” Review of Financial Studies 17 (4): 1073–1102.
   Web of Science ®Google Scholar
• Summers, B., and N. Wilson. 2002. “An Empirical Investigation of Trade Credit Demand.” International Journal of Economics of Business 9 (2): 257–270.
   Google Scholar
• Tauringana, V., and G. Afrifa. 2013. “The Relative Importance of Working Capital Management and its Components to SMEs’ Profitability.” Journal of Small Business and Enterprise Development 20 (3): 453–469.
   Google Scholar
• Wang, X., L. Han, and X. Huang. 2020. “Bank Competition, Concentration and EU SME Cost of Debt.” International Review of Financial Analysis 71: 1–20.
   Web of Science ®Google Scholar
• Whited, T. M., and G. Wu. 2006. “Financial Constraints Risk.” Review of Financial Studies 19 (2): 531–559.
   Web of Science ®Google Scholar
• Wilner, B. S. 2000. “The Exploitation of Relationships in Financial Distress: The Case of Trade Credit.” The Journal of Finance 55 (1): 153–178.
   Web of Science ®Google Scholar
• Yang, X. 2011. “Trade Credit Versus Bank Credit: Evidence from Corporate Inventory Financing.” The Quarterly Review of Economics and Finance 51 (4): 419–434.
   Google Scholar