{"title":"Financial crisis, global liquidity and trade credit channel: Evidence from Türkiye","authors":"Can Kadırgan , Pınar Özlü","doi":"10.1016/j.ememar.2023.101073","DOIUrl":null,"url":null,"abstract":"<div><p>This paper examines the role of trade credit in the transmission of global liquidity conditions. Specifically, we investigate whether trade credit complements or substitutes the decline in bank lending activity as global liquidity tightens. Using a detailed bank and firm-level dataset for Turkish firms, we find that firms which are more bank-finance constrained have less access to trade credit as global liquidity tightens. The rate of trade credit tightening is amplified during crisis periods. While bank-finance constrained firms receive significantly less trade credit from suppliers, they reduce the amount of trade credit that they extend to customers even more, implying that tightening trade credit conditions propagate further through supply chains. In addition, trade credit conditions deteriorate more for small firms and for cash-poor firms in times of crisis.</p></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"57 ","pages":"Article 101073"},"PeriodicalIF":5.6000,"publicationDate":"2023-10-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Emerging Markets Review","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S156601412300078X","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
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Abstract
This paper examines the role of trade credit in the transmission of global liquidity conditions. Specifically, we investigate whether trade credit complements or substitutes the decline in bank lending activity as global liquidity tightens. Using a detailed bank and firm-level dataset for Turkish firms, we find that firms which are more bank-finance constrained have less access to trade credit as global liquidity tightens. The rate of trade credit tightening is amplified during crisis periods. While bank-finance constrained firms receive significantly less trade credit from suppliers, they reduce the amount of trade credit that they extend to customers even more, implying that tightening trade credit conditions propagate further through supply chains. In addition, trade credit conditions deteriorate more for small firms and for cash-poor firms in times of crisis.
期刊介绍：
The intent of the editors is to consolidate Emerging Markets Review as the premier vehicle for publishing high impact empirical and theoretical studies in emerging markets finance. Preference will be given to comparative studies that take global and regional perspectives, detailed single country studies that address critical policy issues and have significant global and regional implications, and papers that address the interactions of national and international financial architecture. We especially welcome papers that take institutional as well as financial perspectives.
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