Laeven, LucKlapper, LeoraRajan, Raghuram2012-03-192012-03-192011-07-01https://hdl.handle.net/10986/3490The authors employ a novel dataset on almost 30,000 trade credit contracts to describe the broad characteristics of the parties that contract together; the key contractual terms, such as the discount for early payment; and the days by when payment is due. Whereas prior work has typically used information on only one side of the buyer-seller transaction, this paper utilizes information on both. The authors find that the largest and most creditworthy buyers receive contracts with the longest maturities from smaller suppliers, with the latter extending credit to the former perhaps as a way of certifying product quality. Discounts for early payment seem to be offered to riskier buyers to limit the potential nonpayment risk when credit is extended for non-financial reasons.CC BY 3.0 IGOACCESS TO CREDITACCESS TO FINANCEACCESS TO FINANCINGACCOUNTS PAYABLEACCOUNTS RECEIVABLEACCOUNTS RECEIVABLESADVERSE SELECTIONAFFILIATED ORGANIZATIONSANALYSIS OF VARIANCEASYMMETRIC INFORMATIONBALANCE SHEETBANK CREDITBANKSBARGAINING POWERBILATERAL CONTRACTBORROWINGBORROWING COSTSCAPITAL STRUCTURECENTRAL BANKCOLLATERALCOMPARATIVE ADVANTAGECOMPETITIVENESSCONTRACTUAL TERMSCREDIT CONSTRAINED FIRMSCREDIT CONTRACTCREDIT CONTRACTSCREDIT DEFAULTSCREDIT LOSSESCREDIT MARKETCREDIT PORTFOLIOCREDIT PROVISIONCREDIT QUALITYCREDIT RATINGCREDIT RATIONINGCREDIT RELATIONSHIPSCREDIT RISKCREDIT TERMSCREDITSCREDITWORTHINESSCURRENCYDEBTDEBT COLLECTORSDEBT MATURITYDEFAULT RISKDEPENDENTDEVELOPING COUNTRIESDEVELOPMENT POLICYDISCOUNT RATEDISCRIMINATIONDUMMY VARIABLEDURABLEDURABLE GOODSEXPLOITATIONEXPORTEREXTERNAL FINANCINGFEDERAL RESERVEFINANCESFINANCIAL CRISESFINANCIAL CRISISFINANCIAL DISTRESSFINANCIAL INSTITUTIONSFINANCIAL INTERMEDIARIESFINANCIAL INTERMEDIARYFINANCIAL MANAGEMENTFINANCIAL MARKETSFINANCIAL RISKFINANCIAL RISKSFINANCIAL SHOCKSFINANCIAL STUDIESFINANCIERSFINANCING CONSTRAINTSFINANCING COSTSFOREIGN COURTSGREATER ACCESSGUARANTEE PRODUCTGUARANTYIMPORT DUTIESINFORMAL CREDITINFORMATIONAL ASYMMETRYINSURANCEINTEREST RATEINTEREST RATESINTERNATIONAL BANKINTERNATIONAL FIRMSINTERNATIONAL TRADEINTRINSIC VALUEINVENTORYINVENTORY MANAGEMENTINVESTMENT RATINGJURISDICTIONSLARGE FIRMSLIQUIDATIONLIQUIDATION OF ASSETSLIQUIDITYMARKET COMPETITIONMATURITIESMATURITYMISREPORTINGMONETARY FUNDMULTINATIONALMULTINATIONAL FIRMSNONPAYMENTPAYMENT TERMSPERFORMANCE BONDPERISHABLE GOODSPORTFOLIOPRICE DISCRIMINATIONPROMPT PAYMENTSPROPRIETARY INFORMATIONREGRESSION ANALYSISRISK MANAGEMENTRISK OF DEFAULTSMALL BUSINESSSMALL BUSINESS FINANCESMALL BUSINESS FINANCESSUPPLY CHAINSWAPTERM CREDITTRADE CREDITTRADE FINANCETRANSACTIONTRANSACTIONS COSTSTURNOVERWORKING CAPITALTrade Credit ContractsWorld Bank10.1596/1813-9450-5726