Browsing by Author "Monteiro, Marina Marques"
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- Trade Credit, inventories and contagion effectPublication . Monteiro, Marina Marques; Gama, Ana Paula Bernardino Matias; Monteiro, JoãoThis investigation access if an inventory management motivation could explain the use trade credit, as well if a trade credit contagion effect occurs during periods of financial crisis. Therefore, a panel dataset of Portuguese manufacturing SME firms, over the period of 2000-2009, and employing a panel data methodology, the results confirm the existence of an incentive for firms to offer and receive trade credit in order to promote sales in the first instance, and in a second instance, to reduce inventory levels and the associated costs. Moreover, credit constraints during a financial crisis cause firms holding high-levels of accounts receivable to postpone payments to suppliers. Specifically, high-risk firms receive more suppliers’ credit due to suppliers concern about their customer's survival.