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Robin Hood or not: IPO overfunding and trade credit

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  • Lu Zhang
  • Jincai Li
  • Huijuan Wang

Abstract

This article studies the role of initial public offering (IPO) overfunding in the reallocation of resources from the view of trade credit. The results show that, in general, the degree of liquidity supplement from IPO overfunding is positively correlated with the trade credit provision. Trade credit acts as Robin Hood to help the reallocation of direct financing resources. In addition, this effect is more pronounced for companies with strong product-market power, or when economic uncertainty policy is higher.

Suggested Citation

  • Lu Zhang & Jincai Li & Huijuan Wang, 2021. "Robin Hood or not: IPO overfunding and trade credit," Applied Economics Letters, Taylor & Francis Journals, vol. 28(14), pages 1152-1156, August.
    • Handle: RePEc:taf:apeclt:v:28:y:2021:i:14:p:1152-1156
    DOI: 10.1080/13504851.2020.1803480
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    Cited by:

    1. Liu, Shangqun & Wang, Jiamin & Li, Qian, 2023. "Alternative data and trade credit financing: Evidence from third-party online sales disclosure," Finance Research Letters, Elsevier, vol. 58(PB).

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