Abstract

http://ssrn.com/abstract=926976
 
 

References (44)



 
 

Citations (7)



 


 



Are Trade Creditors Relationship Lenders?


Hirofumi Uchida


Kobe University - Graduate School of Business Administration

Gregory F. Udell


Indiana University - Department of Finance

Wako Watanabe


Osaka University - Institute of Social and Economic Research (ISER)

April 2006

RIETI Discussion Paper No. 06-E-026

Abstract:     
Despite the importance of the hypothesis that trade creditors may act as relationship lenders, it has been virtually impossible to directly test this hypothesis because of a lack of data. We attempt to overcome this problem by using a relatively new Japanese database on small and midsized enterprises (SMEs) that contains information on the strength of the buyer-seller relationship. We find some evidence that trade creditors may be relationship lenders. However, we also find evidence that trade creditors may be financial statement lenders. Our results are generally quite sensitive to model specification in both our quantity and terms of credit regressions. Thus, our results can only be viewed as suggestive of the possibility that trade creditors acquire private soft information over time and use this information to set the terms of trade financing.

Number of Pages in PDF File: 33

Keywords: Trade Credit, Relationship Lending, Credit Availability, Information Accumulation, Bank Loan

JEL Classification: G32, G21, L14, L13, L22

working papers series


Download This Paper

Date posted: August 30, 2006  

Suggested Citation

Uchida, Hirofumi and Udell, Gregory F. and Watanabe, Wako, Are Trade Creditors Relationship Lenders? (April 2006). RIETI Discussion Paper No. 06-E-026. Available at SSRN: http://ssrn.com/abstract=926976 or http://dx.doi.org/10.2139/ssrn.926976

Contact Information

Hirofumi Uchida (Contact Author)
Kobe University - Graduate School of Business Administration ( email )
2-1, Rokkodai-cho, Nada-ku
Kobe, 657-8501
Japan
81-78-803-6949 (Phone)
HOME PAGE: http://www.b.kobe-u.ac.jp/~uchida
Gregory F. Udell
Indiana University - Department of Finance ( email )
1309 E. 10th St.
Bloomington, IN 47405
United States
Wako Watanabe
Osaka University - Institute of Social and Economic Research (ISER) ( email )
6-1 Mihogaoka
Ibaraki, Osaka 567-0047
Japan
Feedback to SSRN


Paper statistics
Abstract Views: 1,104
Downloads: 155
Download Rank: 107,056
References:  44
Citations:  7

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo5 in 0.328 seconds