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Cheap trade credit and competition in downstream markets
Giannetti, Mariassunta
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Serrano-Velarde, Nicolas
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Tarantino, Emanuele
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DOI:
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https://doi.org/10.2139/ssrn.3070979
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URL:
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https://www.researchgate.net/publication/321379578...
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Weitere URL:
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https://papers.ssrn.com/sol3/papers.cfm?abstract_i...
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Dokumenttyp:
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Arbeitspapier
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Erscheinungsjahr:
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2017
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Titel einer Zeitschrift oder einer Reihe:
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Swedish House of Finance research paper
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Band/Volume:
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17-20
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Ort der Veröffentlichung:
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Stockholm
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Sprache der Veröffentlichung:
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Englisch
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Einrichtung:
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Fakultät für Rechtswissenschaft und Volkswirtschaftslehre > VWL, Mikroökonomik (Juniorprofessur) (Tarantino 2014-2019)
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Fachgebiet:
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330 Wirtschaft
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Fachklassifikation:
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JEL:
G3 , D2 , L1,
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Freie Schlagwörter (Englisch):
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Trade credit , competition , input prices , supply chains
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Abstract:
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Using a unique matched dataset of customers and suppliers, we provide evidence that suppliers offer trade credit to high-bargaining-power customers to ease competition in downstream markets in which they have a large number of other customers. Differently from price discounts, trade credit can target infra-marginal units and does not lower the marginal cost of the high-bargaining-power customers. In equilibrium, the latter do not steal market share from the competitors and the supplier can preserve profitable sales to low-bargaining-power customers. We show that empirically trade credit is not monotonically increasing in past purchases, as is consistent with our conjecture that it targets infra-marginal units. Our results are not driven by differences in suppliers' ability to provide trade credit, customer-specific shocks or endogenous location decisions.
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 | Dieser Eintrag ist Teil der Universitätsbibliographie. |
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