Bank Debt and Trade Credit for SMEs: International Evidence

30 Pages Posted: 11 Sep 2014 Last revised: 10 Nov 2015

See all articles by Guillaume Andrieu

Guillaume Andrieu

Montpellier Business School

Raffaele Stagliano

University of Messina

Peter van der Zwan

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Date Written: July 10, 2015

Abstract

This paper examines the links between firm age, firm size and the ability to obtain capital in a sample of European SMEs. The results indicate that age and size are positively linked to debt capacity. Furthermore, our analysis reveals that it is crucial to distinguish between bank debt financing and trade credit. Young and small firms are more subject to denial due to the higher moral hazard they represent for a bank. Only very young firms are more constrained for trade credit. The results of simultaneous analysis show that trade credit is positively related to bank credit financing, thus providing empirical support for the complementarity of these forms of financing.

Keywords: Debt capacity; Bank loan; Trade Credit; Information asymmetry

JEL Classification: G32, G33

Suggested Citation

Andrieu, Guillaume and Stagliano, Raffaele and van der Zwan, Peter, Bank Debt and Trade Credit for SMEs: International Evidence (July 10, 2015). Available at SSRN: https://ssrn.com/abstract=2494213 or http://dx.doi.org/10.2139/ssrn.2494213

Guillaume Andrieu (Contact Author)

Montpellier Business School ( email )

Raffaele Stagliano

University of Messina ( email )

Piazza Pugliatti, 1
Messina, 98122
Italy

Peter Van der Zwan

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

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