Peer-Reviewed Journal Details
Mandatory Fields
McGuinness G. Hogan T. Powell R.
2018
April
Journal of Corporate Finance
European trade credit use and SME survival
Published
()
Optional Fields
Country effects Financial crisis Financial distress Panel data SMEs Survival Trade credit
49
81
103
© 2017 We examine if trade credit helped financially constrained SMEs survive the recent financial crisis. Using data for 202,696 SMEs across 13 European countries over the period 2003–2012, we show that trade credit had a large positive impact on firm survival, such that a one standard deviation increase in trade credit results in a 21% decrease in the likelihood of distress. We also report evidence of a significant redistribution effect, with cash rich or unconstrained SMEs extending significantly more net trade credit than their less financially resourced counterparts. The results are robust to several econometric concerns.
0929-1199
10.1016/j.jcorpfin.2017.12.005
Grant Details