Author information:
Dániel Havran: Corvinus University of Budapest, Associate Professor. E-mail: daniel.havran@uni-corvinus.hu
Péter Kerényi: Corvinus University of Budapest, PhD student; Pallas Athene Domus Educationis Foundation, Scholar. E-mail: peter.kerenyi@uni-corvinus.hu
Attila Víg: Corvinus University of Budapest, PhD student; Pallas Athene Domus Educationis Foundation, Scholar. E-mail: attila.vig@uni-corvinus.hu
Abstract:
This paper addresses the way in which trade credit was used by Hungarian firms in the period between 2010 and 2015. Relying on Burkart and Ellingsen’s (2004) theory of trade credit, we use panel data on 14,554 Hungarian firms (including 68 large corporations) to estimate the relationship of trade credit and short-term bank credit. Estimated on sub-samples broken down by profitability, our results only confirm a complementary relationship. We also examine the relationship separately for each category of firm size. We found a complementary relationship for small and microenterprises, whereas the results obtained for large corporations imply a substitution effect. In Hungary, in the period after 2013 accounts payable tended to be increased by financially constrained micro and medium-sized enterprises and mostly held steady by financially unconstrained firms.
Cite as (APA):
Havran, D., Kerényi, P., & Víg, A. (2017). Trade Credit or Bank Credit? – Lessons Learned from Hungarian Firms between 2010 and 2015. Financial and Economic Review, 16(4), 86–121. https://doi.org/10.25201/FER.16.4.86121
Column:
Study
Journal of Economic Literature (JEL) codes:
G32, C23
Keywords:
trade credit, financial constraints
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