Title
Local financial development and the trade credit policy of Italian SMEsLocal financial development and the trade credit policy of Italian SMEs
Author
Faculty/Department
Faculty of Applied Economics
Research group
Accountancy and Finance
Publication type
article
Publication
Dordrecht,
Subject
Economics
Source (journal)
Small business economics: an international journal. - Dordrecht
Volume/pages
44(2015):4, p. 905-924
ISSN
0921-898X
ISI
000351580800011
Carrier
E
Target language
English (eng)
Full text (Publishers DOI)
Affiliation
University of Antwerp
Abstract
We investigate the relation between local financial development and trade credit in an integrated financial market. Our results suggest that trade credit complements the formal finance of small- and medium-sized enterprises (SMEs) at the local level. Provincial banking development in Italy increases the provision of trade credit by SMEs and stimulates the redistribution of loans via trade credit. However, cooperative banking reduces the use of trade credit at the local level. Evidence shows that lower levels of provincial banking development are linked with a stronger decline in trade credit at the start of the global financial crisis. We also find that SMEs in provinces with industrial districts use more trade credit. Our results confirm that local differences in banking development and the trade credit policy of SMEs within countries matter, adding to earlier findings that the provision of trade credit is complementary to the development of financial institutions at the country level.
E-info
https://repository.uantwerpen.be/docman/iruaauth/64b0c4/36c9311.pdf
Full text (open access)
https://repository.uantwerpen.be/docman/irua/d56821/9318.pdf
E-info
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Handle