Asset Liquidity and Trade Credit: International Evidence

We examine the association between asset liquidity and trade credit. We expect that firms having more asset liquidity prefer to use less trade credit. Using international data of 69 countries, we find that firms having more asset liquidity prefer to use less trade credit. Our results are robust to a...

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Published inThe International trade journal Vol. 36; no. 1; pp. 24 - 42
Main Authors Islam, Mohammad Nazrul, Bepari, Md. Khokan, Nahar, Shamsun
Format Journal Article
LanguageEnglish
Published Laredo Routledge 2022
Taylor & Francis Ltd
Subjects
Asset liquidity
cost of capital
cost of debt
Credit
International trade
sources of finance
trade credit
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Abstract We examine the association between asset liquidity and trade credit. We expect that firms having more asset liquidity prefer to use less trade credit. Using international data of 69 countries, we find that firms having more asset liquidity prefer to use less trade credit. Our results are robust to a wide variety of fixed effects, using change regression, propensity score matching, excluding outliers, and using alternative measures of trade credit and asset liquidity.
AbstractList We examine the association between asset liquidity and trade credit. We expect that firms having more asset liquidity prefer to use less trade credit. Using international data of 69 countries, we find that firms having more asset liquidity prefer to use less trade credit. Our results are robust to a wide variety of fixed effects, using change regression, propensity score matching, excluding outliers, and using alternative measures of trade credit and asset liquidity.
Author Bepari, Md. Khokan
Nahar, Shamsun
Islam, Mohammad Nazrul
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SubjectTerms Asset liquidity
cost of capital
cost of debt
Credit
International trade
sources of finance
trade credit
Title Asset Liquidity and Trade Credit: International Evidence
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