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Access to public capital markets and the extension of trade credit: An empirical analysis of Korean public and private firms

Author

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  • Im, Hyun Joong
  • Chong, Byung-Uk

Abstract

Using a large dataset of Korean public and private firms, we show that public listing does not influence the supply of trade credit among firms affiliated with a large business group (chaebol). Meanwhile, non-affiliated public firms provide more trade credit to customers than their private counterparts. Public listing allows non-affiliated firms to have greater access to cheaper sources of external capital, thereby increasing the supply of trade credit. However, the results for chaebol-affiliated firms may be attributed to well-functioning internal capital markets. Our results shed light on the substitution between internal and external capital markets.

Suggested Citation

  • Im, Hyun Joong & Chong, Byung-Uk, 2022. "Access to public capital markets and the extension of trade credit: An empirical analysis of Korean public and private firms," Finance Research Letters, Elsevier, vol. 46(PB).
    • Handle: RePEc:eee:finlet:v:46:y:2022:i:pb:s154461232100461x
    DOI: 10.1016/j.frl.2021.102484
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    References listed on IDEAS

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    More about this item

    Keywords

    Trade credit; Public listing; Business group affiliation; Public firms; Private firms;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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