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Advisor(s)
Abstract(s)
Small companies face significant difficulties in accessing finance, and the use of bank
credit and trade credit are the primary sources of financing, specifically in small countries, with
little market liquidity, and focused on the banking system, as is the case of Portugal. The main
objective of this article is to identify significant drivers of bank and trade credit, as well as investigate
the complementary or substitutive relationship between them, considering that both constitute an
essential source of financing for small and medium-sized enterprises (SMEs). The sample comprises
5860 companies, and the analysis was performed using panel data methodology (2010–2019). The
results suggest that, during the period in which the financial crisis was most felt in the country
(2010–2013), companies intensified their demand for trade credit, and in the following years for bank
credit. Our evidence does support the substitution hypothesis between trade and bank credit.
Description
Keywords
SMEs Bank credit Trade credit Financial crisis Credit constraints
Citation
Pinto, A. P. S., Henriques, C. M. R., Cardoso, C. E. O. da S., & Neves, M. E. D. (2023). Bank Credit and Trade Credit: The Case of Portuguese SMEs from 2010 to 2019. Journal of Risk and Financial Management, 16(3). https://doi.org/10.3390/jrfm16030170