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Impact of Trade Credit on Firm Inventory Investment During Financial Crises: Evidence from Latin America

Author

Listed:
  • Hsia Hua Sheng
  • Adriana Bruscato Bortoluzzo
  • Gisler André Pereira dos Santos

Abstract

This paper studies whether trade credit is used as a substitute for bank credit in crisis periods in Latin America. The sample is composed of firms listed on the Argentine, Brazilian, and Mexican stock exchanges from 1994 to 2009. For the small firms, the substitution hypothesis was not rejected. However, this hypothesis was not confirmed homogeneously for all the firms during the crises. Unlike Brazilian and Argentine firms, Mexican firms use more cash reserves than trade credit. The big firms tend to use other financing sources. A pattern of trade credit use by sector has not yet been found.

Suggested Citation

  • Hsia Hua Sheng & Adriana Bruscato Bortoluzzo & Gisler André Pereira dos Santos, 2013. "Impact of Trade Credit on Firm Inventory Investment During Financial Crises: Evidence from Latin America," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 49(S4), pages 32-52, September.
    • Handle: RePEc:mes:emfitr:v:49:y:2013:i:s4:p:32-52
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    Cited by:

    1. Newton Arata & Hsia Hua Sheng & Mayra Ivanoff Lora, 2015. "Internationalization and Corporate Cash Holdings: Evidence from Brazil and Mexico," RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração, vol. 19(spe1), pages 1-19.

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