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Short-Term Debt Financing of Korean Firms : Effects of Financial Constraints, Bargaining Power, and Internal Capital Markets on Trade Credit Financing

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영어

This paper investigates the short-term debt financing behavior of Korean firms. In particular, the determinants of trade credit demand and supply respectively are examined with emphasis on the key factors such as financial constraint, bargaining power, and internal capital markets. Empirical results show that financial constraint plays a critical role in determining trade credit demand and supply. One of the interesting and unique empirical results of our paper is the positive relationship between financial constraints and trade credit demand and supply. For bargaining power of buyers and suppliers, two potential sources are examined. Product market power is found to be a crucial factor that determines trade credit demand even after the effect of financial constraint is controlled for. Internal capital markets of large business groups also work to influence both trade credit demand and supply of Korean firms. The findings of our paper shed new lights on the rationale for trade credit financing in Korean short-term corporate debt markets.

목차


 I. Introduction
 II. Literature Review
 III. Development of Hypotheses
 IV. Research Design
  4.1. Data Sources and Sample
  4.2. Measurement of Variables
  4.3. Summary and Classification of Sample
  4.4. Regression Models for Estimating Trade Credit Demand and Supply
 V. Financial Constraints, Product Market Power, and Trade Credit Financing
  5.1. Effects of Financial Constraints on Trade Credit Demand
  5.2. Effects of Bargaining Power on Trade Credit Demand
  5.3. Effects of Financial Constraints and Bargaining Power on Trade Credit Supply
 VI. Effects of Affiliation to Large Business Group on Trade Credit Financing
  6.1. Classifications of Sample by Affiliation to Large Business Group
  6.2. Effects of Affiliation to Large Business Group on Trade Credit Demand
  6.3. Effects of Affiliation to Large Business Group on Trade Credit Supply
 VII. Summary and Conclusions
 References
  Definitions of Variables

저자정보

  • Byung-Uk Chong College of Business Administration, University of Seoul
  • Heonsoo Kim College of Business Administration, University of Seoul

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