SMEs Access to Finance and the Value of Supplier Financing
Spanish Journal of Finance and Accounting, Vol. 46, Issue 4, pp. 455-483, 2017
48 Pages Posted: 27 Jun 2017 Last revised: 19 Oct 2017
Date Written: June 15, 2017
This paper examines the relationship between supplier financing and small and medium-sized firms' value as well as the variation in the marginal value of supplier financing that arises from differences in access to financial markets and internal financing. We employ a sample of Spanish SMEs from the period 1998-2014. The results show a positive relationship between supplier financing and firm value. Furthermore, the findings reveal that the marginal value of supplier financing declines with leverage, short-term financial debt, and cash flow, whereas it increases with financial costs. Also, the results show a higher marginal value of accounts payable during the financial crisis period when bank credit is reduced, for all firms, regardless of their access to finance. These results are in agreement with the financing motive for trade credit use. Firms with better availability of financial resources (internal and external) and with a lower financial cost place less value on supplier financing.
Keywords: Trade Credit, Supplier Financing, SMEs, Firm Value
JEL Classification: G30, G31
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