Publication:
Customer Market Power and the Provision of Trade Credit : Evidence from Eastern Europe and Central Asia

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dc.contributor.authorVan Horen, Neeltje
dc.date.accessioned2012-06-07T21:44:21Z
dc.date.available2012-06-07T21:44:21Z
dc.date.issued2007-07
dc.description.abstractStatistics show that the sale of goods on credit is widespread among firms even when they are capital constrained and thus face relatively high costs in providing trade credit. This study provides an explanation for this by arguing that customers who possess strong market power are able to increase their customer surplus by demanding to purchase the goods on credit. This gain in customer surplus increases with the degree of asymmetric information between buyer and seller with respect to product quality. Therefore, firms that are perceived as risky are especially subject to the market power of the customer and have to sell their goods on credit. Using detailed firm-level data from a large number of firms in Eastern Europe and Central Asia, this study finds evidence consistent with this hypothesis. It finds a strong positive correlation between customer market power and trade credit provision. Furthermore, this relationship is especially strong when the supplier is more risky and in countries with limited financial sector development or a weak legal system.en
dc.identifierhttp://documents.worldbank.org/curated/en/2007/07/7965080/customer-market-power-provision-trade-credit-evidence-eastern-europe-central-asia
dc.identifier.doi10.1596/1813-9450-4284
dc.identifier.urihttps://hdl.handle.net/10986/7477
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper; No. 4284
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectACCOUNTING
dc.subjectAFFILIATED ORGANIZATIONS
dc.subjectASYMMETRIC INFORMATION
dc.subjectBORROWING
dc.subjectBORROWING CONSTRAINTS
dc.subjectCENTRAL BANK
dc.subjectCOMMERCIAL CREDIT
dc.subjectCOMPETITIVENESS
dc.subjectCONSUMER SURPLUS
dc.subjectDEBT
dc.subjectDOMESTIC MARKET
dc.subjectECONOMIC PERFORMANCE
dc.subjectECONOMICS
dc.subjectEXPECTED VALUE
dc.subjectEXPORTS
dc.subjectFINANCIAL CONTRACTS
dc.subjectFINANCIAL INTERMEDIARIES
dc.subjectFINANCIAL MANAGEMENT
dc.subjectFINANCIAL SECTOR
dc.subjectGDP
dc.subjectGDP PER CAPITA
dc.subjectGROWTH RATE
dc.subjectINFLATION
dc.subjectINSURANCE
dc.subjectINTERNATIONAL TRADE
dc.subjectINVESTMENT CLIMATE
dc.subjectLESS DEVELOPED COUNTRY
dc.subjectMARKET COMPETITION
dc.subjectMARKET POWER
dc.subjectMONETARY POLICY
dc.subjectMONOPOLY
dc.subjectMORAL HAZARD
dc.subjectPRICE DISCRIMINATION
dc.subjectPRICE INCREASE
dc.subjectPRICE REGULATION
dc.subjectPRODUCT QUALITY
dc.subjectPRODUCTION COSTS
dc.subjectPROPERTY RIGHTS
dc.subjectPURCHASING
dc.subjectREAL GDP
dc.subjectREGRESSION ANALYSIS
dc.subjectRETAIL
dc.subjectRISK EXPOSURE
dc.subjectSALE
dc.subjectSALES
dc.subjectSMALL BUSINESS
dc.subjectSUBSTITUTES
dc.subjectSUPPLIER
dc.subjectSUPPLIERS
dc.subjectTOTAL SALES
dc.subjectTRADE CREDIT
dc.subjectTRADE CREDITORS
dc.subjectWORKING CAPITAL
dc.titleCustomer Market Power and the Provision of Trade Credit : Evidence from Eastern Europe and Central Asiaen
dspace.entity.typePublication
okr.crossref.titleCustomer market power and the provision of trade credit : evidence from Eastern Europe and Central Asia
okr.date.doiregistration2025-04-10T10:42:42.634773Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2007/07/7965080/customer-market-power-provision-trade-credit-evidence-eastern-europe-central-asia
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeFinance and Markets
okr.globalpracticeFinance and Markets
okr.globalpracticeTrade and Competitiveness
okr.guid613801468251378691
okr.identifier.doi10.1596/1813-9450-4284
okr.identifier.externaldocumentum000158349_20070725150007
okr.identifier.internaldocumentum7965080
okr.identifier.reportWPS4284
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2007/07/25/000158349_20070725150007/Rendered/PDF/WPS4284.pdfen
okr.region.administrativeEurope and Central Asia
okr.topicEconomic Theory and Research
okr.topicMacroeconomics and Economic Growth::Investment and Investment Climate
okr.topicFinance and Financial Sector Development::Financial Intermediation
okr.topicMacroeconomics and Economic Growth::Markets and Market Access
okr.topicInternational Economics and Trade::Access to Markets
okr.topicInternational Economics and Trade
okr.unitDevelopment Research Group (DECRG)
okr.volume1 of 1
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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