Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73428
Authors: 
Eck, Katharina
Engemann, Martina
Schnitzer, Monika
Year of Publication: 
2012
Series/Report no.: 
BGPE Discussion Paper 116
Abstract: 
Internationally active firms rely intensively on trade credits even though they are considered particularly expensive. This phenomenon has been little explored so far. Our theoretical analysis shows that trade credits can alleviate financial constraints arising from asymmetric information because they serve as a quality signal and reduce the uncertainty related to international transactions. We use unique survey data on German enterprises to test the effect of the use of trade credits on firms' exporting and importing behavior, both at the extensive and intensive margins. Our results support the assertion that trade credits have a positive impact on firms' exporting and importing activities.
Subjects: 
trade credits
international trade
financial constraints
export
import
JEL: 
F10
G30
Document Type: 
Working Paper

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