{
  "title": "Does Trade Credit Substitute Bank Credit? Evidence From Firm-Level Data",
  "publication": "IMF Working Papers, August 1, 2003",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/does-trade-credit-substitute-bank-credit-evidence-from-firm-level-data-16682",
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  "summary": "The paper examines micro data on Italian manufacturing firms' inventory behavior to test the Meltzer (1960) hypothesis according to which firms substitute trade credit for bank credit during periods of monetary tightening.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- Author: Guido De Blasio\n- Date: August 1, 2003\n- Core question: Tests the Meltzer (1960) hypothesis that firms substitute trade credit for bank credit during periods of monetary tightening by examining micro data on Italian manufacturing firms' inventory behavior.\n- Main conclusion: Inventory investment is constrained by the availability of trade credit; however, the magnitude of the substitution effect is not sizable.\n- Interpretation: Findings align with micro theories of trade credit and evidence on firm practices, which indicate credit terms display modest variations over time."
    },
    {
      "heading": "Key Findings and Evidence",
      "content": "- Inventory investment of Italian manufacturing firms is constrained by availability of trade credit.\n- The substitution effect of trade credit for bank credit during monetary tightening is present but quantitatively limited (described as \"not sizable\").\n- Results are consistent with micro-theoretical expectations and observed modest temporal variation in credit terms."
    },
    {
      "heading": "Subjects and Keywords",
      "content": "- Subjects: Bank credit, Credit, External debt, Financial statements, Monetary policy, Monetary tightening, Money, Public financial management (PFM), Trade credits\n- Keywords: Bank credit, Credit, Financial statements, Manufacturing Firms, Monetary Policy, Monetary tightening, TC coefficient, TC constraint, TC variable, TC-bank credit substitution hypothesis, Trade Credit, Trade credits, underling TC determinant, WP\n\n---\n\n Content in this bundle\n\n- Does Trade Credit Substitute for Bank Credit? Evidence from Firm-Level Data - WP/03/166\n  - Does Trade Credit Substitute for Bank Credit? Evidence from Firm-Level Data - WP/03/166 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Does Trade Credit Substitute for Bank Credit? Evidence from Firm-Level Data - WP/03/166 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/does-trade-credit-substitute-bank-credit-evidence-from-firm-level-data-16682"
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    "Authors: Guido De Blasio",
    "Published: August 1, 2003",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451858129.001",
    "Author: Guido De Blasio",
    "Date: August 1, 2003",
    "Core question: Tests the Meltzer (1960) hypothesis that firms substitute trade credit for bank credit during periods of monetary tightening by examining micro data on Italian manufacturing firms' inventory behavior.",
    "Main conclusion: Inventory investment is constrained by the availability of trade credit; however, the magnitude of the substitution effect is not sizable.",
    "Interpretation: Findings align with micro theories of trade credit and evidence on firm practices, which indicate credit terms display modest variations over time.",
    "Inventory investment of Italian manufacturing firms is constrained by availability of trade credit.",
    "The substitution effect of trade credit for bank credit during monetary tightening is present but quantitatively limited (described as \"not sizable\").",
    "Results are consistent with micro-theoretical expectations and observed modest temporal variation in credit terms.",
    "Subjects: Bank credit, Credit, External debt, Financial statements, Monetary policy, Monetary tightening, Money, Public financial management (PFM), Trade credits",
    "Keywords: Bank credit, Credit, Financial statements, Manufacturing Firms, Monetary Policy, Monetary tightening, TC coefficient, TC constraint, TC variable, TC-bank credit substitution hypothesis, Trade Credit, Trade credits, underling TC determinant, WP",
    "**Does Trade Credit Substitute for Bank Credit? Evidence from Firm-Level Data - WP/03/166**"
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