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Trade credit and bank relationships: evidence from pre-World War I Belgium
[journal article]
Abstract We investigate the determinants of trade credit granted by suppliers in a historical environment which was characterized by high information asymmetries and strong banks, focusing on the role of bank-firm relationships. Our results, which are based on a unique sample of 535 firm-year observations fo... view more
We investigate the determinants of trade credit granted by suppliers in a historical environment which was characterized by high information asymmetries and strong banks, focusing on the role of bank-firm relationships. Our results, which are based on a unique sample of 535 firm-year observations for 125 listed Belgian firms in four dominant industries in the period 1905-1909, are generally consistent with the financing role of trade credit. They suggest that trade credit was a tool for channeling funds from firms with close bank ties to other firms, which is consistent with findings for contemporary developing countries.... view less
Classification
Social History, Historical Social Research
Economic Sectors
Financial Planning, Accountancy
Free Keywords
trade credit; bank-firm relationships; Pre-World War I Belgium; economic institutions
Document language
English
Publication Year
2010
Page/Pages
26 p.
Journal
Applied Economics (2010)
DOI
https://doi.org/10.1080/00036840903166269
Status
Postprint; peer reviewed
Licence
PEER Licence Agreement (applicable only to documents from PEER project)