Firms as Credit Suppliers: An Empirical Study of Spanish Firms

What is it about?

The purposes of the study are: (i) to contribute evidence on the role played by ordinary commercial firms in providing finance to other firms by granting trade credit to customers; and (ii) to test some theories about the motives of small and medium-sized firms in extending such trade credit.

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Why is it important?

The paper contributes to the scarce empirical literature about the motives for granting trade credit by small and medium-sized firms. This is also the first study to analyse this behaviour from a dataset of firms in the Canary Islands (Spain).