Bank Credit and Corporate Working Capital Management

40 Pages Posted: 22 Nov 2016 Last revised: 6 Nov 2017

See all articles by Chongyang Chen

Chongyang Chen

Pacific Lutheran University

Robert L. Kieschnick

University of Texas at Dallas

Date Written: November 5, 2017

Abstract

We investigate how changes in the availability of bank credit influence how public firms manage their working capital, which is essential to their operations. In doing so, we provide an enhanced understanding of what significantly influences corporate working capital management. We find that changes in the availability of bank credit significantly influence a number of aspects of a firm’s working capital policies, and these effects often differ across firms that are more or less dependent on bank financing. Interestingly, our evidence points to the importance of the changing mix of U.S. companies for working capital practices.

Keywords: Bank Credit, Working Capital Management

JEL Classification: G21, G28, G32, O16

Suggested Citation

Chen, Chognyang and Kieschnick, Robert L., Bank Credit and Corporate Working Capital Management (November 5, 2017). Available at SSRN: https://ssrn.com/abstract=2873118 or http://dx.doi.org/10.2139/ssrn.2873118

Chognyang Chen

Pacific Lutheran University ( email )

South Garfield Street
Tacoma, WA 98112
United States

Robert L. Kieschnick (Contact Author)

University of Texas at Dallas ( email )

800 W. Campbell Rd, SM31
Richardson, TX 75080
United States
972-883-6273 (Phone)

HOME PAGE: http://www.utdallas.edu/~rkiesch/

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