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- Publisher
- Emerald Publishing
- Copyright
- Copyright © Emerald Group Publishing Limited
- ISSN
- 0307-4358
- DOI
- 10.1108/eb018621
- Publisher site
- See Article on Publisher Site
Abstract
This paper tests the product quality theory of trade credit with 1993 yearend data for Germany, Japan, United Kingdom, and United States. The results are inconsistent with the transaction and financing theories of trade credit, since the evidence indicates that firms with high sales relative to their assets and firms with larger sizes extend less credit. However, the quality theory of trade credit is not uniformly supported by the data. Moreover, the evidence suggests wide variations of trade credit policies across countries and industries.
Journal
Managerial Finance – Emerald Publishing
Published: Apr 1, 1997