TRADE CREDIT AS QUALITY SIGNAL AN INTERNATIONAL COMPARISON

TRADE CREDIT AS QUALITY SIGNAL AN INTERNATIONAL COMPARISON 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Managerial Finance Emerald Publishing

TRADE CREDIT AS QUALITY SIGNAL AN INTERNATIONAL COMPARISON

Managerial Finance, Volume 23 (4): 10 – Apr 1, 1997

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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 FinanceEmerald Publishing

Published: Apr 1, 1997

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