Does trade credit say anything about banks?

Available from: 
October 2013
Paper author(s): 
Pablo Cotler (Universidad Iberoamericana)
Financial Economics

Bank penetration in Mexico is one of the lowest in Latin America. Further, quarterly surveys done by the Central Bank of Mexico shows that trade credit is used by a percentage of firms that is twice the figure that relies on credit from banks. Notwithstanding such result, there is no empirical work that may help understand what type of firms demand trade credit and which ones use it. Making use of a recent national survey, we find that while smaller and very likely credit rationed firms demand this type of financing, bigger, formal and with access to banking credit are the most likely firms to use trade credit.


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Research section: 
Lacea 2013 annual meeting
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