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Credit rationing and signalling effects of trade credit: Theory and evidence from korean firms

Title
Credit rationing and signalling effects of trade credit: Theory and evidence from korean firms
Authors
Kim S.H.Lee S.A.
Ewha Authors
김성현
SCOPUS Author ID
김성현scopus
Issue Date
2014
Journal Title
Journal of Economic Theory and Econometrics
ISSN
1229-2893JCR Link
Citation
vol. 25, no. 4, pp. 22 - 57
Keywords
Credit rationingEndogenous thresholdSignallingSimultaneous equationsTrade credit
Publisher
Korean Econometric Society
Indexed
SCOPUS scopus
Abstract
We examine interaction among bank credit, trade credit and internal wealth. Our theoretical model derives borrowers’ optimal patterns of credit uses depending on internal wealth levels, subject to credit rationing. In particular, the model incorporates signalling effects of and nonlinear interest schedules for trade credit to account for stylized facts from Korean data that are at odds with previous models. Our empirical results are broadly consistent with presence of signalling effects as well as theoretically predicted interaction patterns. The results could be interpreted as a rough estimate of the extent of credit rationing among sample firms.
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사회과학대학 > 경제학전공 > Journal papers
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