Small and medium-sized enterprises (SMEs) suffered a sharp contraction in their borrowing from banks during the Great Recession. Analyzing a large firm-level database for European countries, the paper shows that trade credit amplified the liquidity squeeze on SMEs, with adverse effects on their real activity. SMEs sharply increased their net trade credit and thus transferred financial resources to larger firms. Given the large weight of SMEs in the economy of European countries, the liquidity squeeze of SMEs likely contributed to the depth of the output fall and the slow recovery in Europe during the Great Recession.

Interenterprise Credit and Adjustment during Financial Crises : The Role of Firm Size / F. Coricelli, M. Frigerio. - In: JOURNAL OF MONEY, CREDIT, AND BANKING. - ISSN 0022-2879. - 51:6(2019 Sep), pp. 1547-1580.

Interenterprise Credit and Adjustment during Financial Crises : The Role of Firm Size

M. Frigerio
2019

Abstract

Small and medium-sized enterprises (SMEs) suffered a sharp contraction in their borrowing from banks during the Great Recession. Analyzing a large firm-level database for European countries, the paper shows that trade credit amplified the liquidity squeeze on SMEs, with adverse effects on their real activity. SMEs sharply increased their net trade credit and thus transferred financial resources to larger firms. Given the large weight of SMEs in the economy of European countries, the liquidity squeeze of SMEs likely contributed to the depth of the output fall and the slow recovery in Europe during the Great Recession.
trade credit; financial crises; SMEs
Settore SECS-P/11 - Economia degli Intermediari Finanziari
Settore SECS-P/09 - Finanza Aziendale
Settore SECS-P/01 - Economia Politica
1-ott-2018
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2434/601644
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