Trade Credit and Bank Relationships: Evidence from Pre-World War I Belgium

27 Pages Posted: 18 Jan 2009

See all articles by Marc Deloof

Marc Deloof

University of Antwerp; University of Antwerp - Antwerp Management School

Wouter Van Overfelt

affiliation not provided to SSRN

Date Written: January 17, 2009

Abstract

We investigate the determinants of trade credit granted by suppliers in a historical environment which was characterized by high information asymmetries and strong banks, focusing on the role of bank-firm relationships. Our results, which are based on a unique sample of 535 firm-year observations for 125 listed Belgian firms in four dominant industries in the period 1905-1909, are generally consistent with the financing role of trade credit. They suggest that trade credit was a tool for channeling funds from firms with close bank ties to other firms, which is consistent with findings for contemporary developing countries.

Keywords: Trade credit policies, accounts receivable, bank relationships, pre-World War 1 Belgium

JEL Classification: G32, G21

Suggested Citation

Deloof, Marc and Van Overfelt, Wouter, Trade Credit and Bank Relationships: Evidence from Pre-World War I Belgium (January 17, 2009). Available at SSRN: https://ssrn.com/abstract=1329348 or http://dx.doi.org/10.2139/ssrn.1329348

Marc Deloof (Contact Author)

University of Antwerp ( email )

Prinsstraat 13
Faculteit TEW
Antwerpen, 2000
Belgium
+32 3 265 41 69 (Phone)
+32 3 265 47 99 (Fax)

HOME PAGE: http://https://www.uantwerpen.be/en/staff/marc-deloof/

University of Antwerp - Antwerp Management School ( email )

Boogkeers 5
Antwerp, 2000
Belgium

Wouter Van Overfelt

affiliation not provided to SSRN ( email )

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