Proceedings of the 14th International Conference on New Ideas in Management, Economics, and Accounting
Year: 2025
DOI:
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Alternative financing during a pandemic: Trade credit and COVID-19
Jagriti Srivastava
ABSTRACT:
Using a cross-country quarterly firm-level data, we empirically examine the impact of COVID19 pandemic on the trade credit channel of firms. Firms that are more financially and operationally resilient are able to obtain higher amounts of trade credit from their supplier firms. We also find that firms: (a) in industries amenable to remote working (b) with positive managerial sentiment and outlook during the pandemic, (c) with higher stakeholder orientation, and (d) in countries with higher interconnected supply chains are able to obtain greater amounts of trade credit during the pandemic. The insights from our study provide evidence to the arguments that supplier firms prefer to extend trade credit to stronger client firms. Furthermore, the study is able to identify some pandemic-specific channels that contribute to the ability to raise trade credit.
keywords: Trade credit, COVID-19, remote working, resilient; interconnected