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Paper considers the impact of cash, debt, trade credit and equity financing on firm efficiency. Paper argues that 1) cash holding negatively affects firm efficiency, 2) debt and trade credit have both positive and negative impact on efficiency, 3) debt and trade credit are more conducive to increasing efficiency than cash holding, 4) trade credit is more conducive to increasing efficiency than debt and 5) the strongest positive impact on efficiency is provided by equity financing. [ABSTRACT FROM AUTHOR]

The Global Financial Crisis (GFC) of 2008 had a dramatic impact worldwide and resulted in numerous firms failing and increased unemployment levels. While there have been many studies conducted which focus on trade credit as an external form of finance for firms during the GFC, there has not been a study based on Australian firms uptake of trade credit when examined in conjunction with European firms uptake during the same period. Therefore, as a result of the identified gap in the existing research the following paper seeks to examine the effect that the GFC and global bank lending constraints had on Australian firms' uptake of trade credit during this period of time. Expanding on this theme, an analysis of whether Australian firms acted in a manner consistent to their European counterparts will be carried out. Furthermore, the paper examines the 10 years following the GFC and what effect trade credit had as a form of external finance during Australia's post-GFC recovery. The research is governed by a positivist design whereby the role of the project team is restricted to the collection and analysis of secondary panel datasets to measure trends over the timeframe of the research. The research datasets consist of Australian firm Days Sales Outstanding (DSO), Bank Loans written to Australian firms and listed firms on the Australian Stock Exchange balance sheet data. The results of the research have found that there was a marked increase in Australian firms' uptake of trade credit finance during the GFC period. Interestingly, external bank finance uptake by Australian firms during the same period remained consistent with no reduction of its uptake by Australian firms which is at odds with a global reduction in the access to bank finance. While Australia is geographically distant from Europe the increased reliance on trade credit by Australian firms during the GFC is consistent with the results of studies carried previously. The 10 years following the GFC saw a reduction in Australian firms' reliance on trade credit as a form of external finance coupled with an increasing uptake of bank finance which suggests of a substitutional relationship between the two forms of external finance available to firms. The implications of the following research resides with the fact that during times of financial crisis Australia is not immune and while there is currently limited research into the role that trade credit has had as a form of external finance for Australian firms, the findings from previous European studies can be applied to Australia with similar results. [ABSTRACT FROM AUTHOR]

this research paper attempts to investigate the behavior of non-financial firms towards the use of trade credit. State owned firms are considered as more credit worthy and the bank loan is easily available to them. We hypothesized that the state owned firms do not face any problem to obtain bank loans. According to trade credit literature the firms with better access to bank loans have a better capacity to grant goods on credit. We have also hypothesized that the bank loan availability makes the nonfinancial firms able to increase the level of trade credit supply. On the other hand, the bank loan availability makes the nonfinancial firms able to decrease the level of trade credit demand. We have applied Pooled Ordinary Least Square to estimate the relationship between bank loan availability and the behavior of firms towards the use of trade credit supply. The results of the study explain that bank loan is easily available to state owned firms and they are also interested to extend more trade credit to their buyers. Most of our results are in line with the theories of trade credit and the previous empirical findings. [ABSTRACT FROM AUTHOR]

Trade credit is a critical source of financing for many SMEs and this study investigates the role of financial statements and other information within trade credit decisions involving smaller entities in Finland, the UK, USA and South Africa. The study adds to the literature by examining the information needs of unincorporated entities as a basis for making comparisons with small, unlisted companies. In-depth, semi-structured interviews in each country were used to collect data from owner-managers of SMEs, credit rating agencies and credit insurers. The findings provide insights into similarities and differences between countries and between developed and developing economies. The evidence suggests that there are three main influences on the trade credit decision: formal and report-based information, soft information relating to social capital and contingency factors. The latter dictate the extent to which hard/formal information versus soft/informal information is used. [ABSTRACT FROM AUTHOR]

In real world, there are many uncertain conditions which cannot be absolutely pre-determined or controlled by the decision maker. Then, by the empirical experience in the market behavior, there are no fixed carrying cost rate, interest paid rate and interest earned rate. In this paper, we will extend Chen et al. [1] model with fuzzification in the carrying cost rate, interest paid rate and interest earned rate, simultaneously, based on the triangular fuzzy numbers to fit the real world. Then, in our new fuzzy model, we will discuss some conditions or theorems to find the optimal solution for the total variable cost per unit time in fuzzy sense. Moreover, we will take some examples to illustrate our proposed model. [ABSTRACT FROM PUBLISHER]

In this paper, we develop models to determine operational and financial decisions of the supply chain under the assumption that the retailer faces budget constraint and the manufacturer offers trade credit to help him. We first assume that the retailer is risk neutral, and derive his optimal ordering and financial decisions. Then, we study the downside risk associated with the retailer and analyze the effect of the risk on the retailer and manufacturer's operational and financial decisions, and provide some numerical examples. [ABSTRACT FROM PUBLISHER]

This paper aims to find out the optimal financing decisions for SME enterprises by analyzing three solutions of financing models, where commercial bank loan and trade credit are effective financing ways for SME enterprises. The financing decisions are considered for the SME enterprise in the two-echelon supply chain environment where the SME enterprise is a retailer, and the manufacturer is a large-size core enterprise that can guarantee the loan for the retailer. A newsvendor model is built to analyze the financing decisions. The conclusions can provide references for small and medium enterprises with financial constraints, thus encouraging the core enterprise of the supply chain to share the risk of loans. [ABSTRACT FROM PUBLISHER]

This paper investigates the effect of state ownership on trade credit financing among Chinese firms. We find that besides market power, state ownership also has a significantly positive effect on the use of trade credit, and thus can serve as a substitute of market power to facilitate trade credit financing. Further analysis indicates that in areas with lower degree of financial market development, the positive effect of state ownership on the trade credit financing is stronger, while the positive effect of market power is weaker. Our study shows that under the background of China's transitional economy, state ownership not only has a positive effect on the access to formal financing from financial intermediaries, but also has an implicit guarantee effect on the access to trade credit financing. [ABSTRACT FROM PUBLISHER]

The OCA criteria offered so far by classical OCA theory were focused on high positive correlation of business cycles in economies composing optimal currency area. This way common monetary policy was suited for all members at the same moment. There was a threat however that despite of initial high positive correlation of business cycles, common monetary policy itself would be a cause of divergence. This could be a result of a different reaction of union's economies to monetary impulses. One of channels central bank uses to influence private sector decisions is a credit one. Authors using a simple framework for capturing monetary policy stance test for substitution of bank credit by trade credit. With a VAR model, cointegration analysis brings information about nature of this reaction and lags present in case of Polish economy. The next step is to cover with this analysis all other EU countries, both composing EMU and those heading toward EMU accession to answer the question if the ECB is going to have the same influence on them. This way questions about another OCA criterion and rationale for joining EMU will be answered. [ABSTRACT FROM AUTHOR]