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INTER‐INDUSTRY DIFFERENCES IN THE RESPONSE OF TRADE CREDIT TO CHANGES IN MONETARY POLICY
Author(s) -
Chiplin Brian,
Wright Mike
Publication year - 1985
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/j.1468-5957.1985.tb00781.x
Subject(s) - economics , monetary policy , trade credit , monetary economics , offset (computer science) , international economics , bank credit , finance , computer science , programming language
Trade Credit is an important source of finance for firms and with increasing emphasis being placed on monetary policy in recent years in many western countries it is important to examine thk relationship between trade credit and monetary policy. This study uses a large firm‐based data series to examine various hypotheses concerning the impact and determination of trade credit flows. The study demonstrates significant differences in the exogenous variables across industries and casts considerable doubt on the validity of earlier aggregated studies of the issue. It is also found that whilst there are dif‐ ferences between industries, tight monetary policy does not seem to be offset by an extension of net trade credit.