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Trade Credit, the Financial Crisis, and SME Access to Finance
Author(s) -
CARBÓVALVERDE SANTIAGO,
RODRÍGUEZFERNÁNDEZ FRANCISCO,
UDELL GREGORY F.
Publication year - 2016
Publication title -
journal of money, credit and banking
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.763
H-Index - 108
eISSN - 1538-4616
pISSN - 0022-2879
DOI - 10.1111/jmcb.12292
Subject(s) - trade credit , credit crunch , bank credit , trade finance , financial crisis , financial system , business , credit history , finance , economics , public finance , macroeconomics
Mounting evidence indicates that firms, particularly SMEs, suffered from a significant credit crunch during this crisis. We analyze for the first time whether trade credit provided an alternative source of external finance to SMEs during the crisis. Using firm‐level Spanish data we find that credit constrained SMEs depend on trade credit, but not bank loans, and that the intensity of this dependence increased during the financial crisis. Unconstrained firms, in contrast, are dependent on bank loans but not on trade credit.