Predictors of Net Trade Credit Exposure: Evidence from the Italian Market

The International Journal of Business and Finance Research, Vol. 4, No. 4, pp. 103-119, 2010

17 Pages Posted: 3 Jul 2011

See all articles by Lucia Gibilaro

Lucia Gibilaro

University of Bergamo

Gianluca Mattarocci

University of Rome Tor Vergata - Department of Management and Law; University of Rome Tor Vergata - Department of Management and Law

Date Written: 2010

Abstract

In light of multiple motivations for the use of trade credit, firms tend to supply and receive trade credit at the same time, so the choice to engage in one of these activities could influence the other. Many studies proposed in the literature define models of trade credit and provide empirical evidence, looking mainly at only one aspect of trade policy at a time. The few studies comparing gross and net exposure models are based on a limited set of variables or on a limited time horizon. In the context of one of the more relevant world markets (Italy), this paper compares models for gross and net exposure, demonstrating a significant difference in the statistical fitness of the two models and in the characteristics of the explanatory variables. The results demonstrate the existence of a strict relationship between trade credit and debt choices and suggest some unique features of net models compared to gross ones.

Keywords: trade credit, Italy

JEL Classification: G31, G32, C31

Suggested Citation

Gibilaro, Lucia and Mattarocci, Gianluca, Predictors of Net Trade Credit Exposure: Evidence from the Italian Market (2010). The International Journal of Business and Finance Research, Vol. 4, No. 4, pp. 103-119, 2010, Available at SSRN: https://ssrn.com/abstract=1875925

Lucia Gibilaro (Contact Author)

University of Bergamo ( email )

Via Salvecchio, 19
Bergamo, 24129
Italy
00390352052675 (Phone)
00390352052549 (Fax)

Gianluca Mattarocci

University of Rome Tor Vergata - Department of Management and Law ( email )

Via Columbia n.2
Roma, 00133
Italy
+390672595903 (Phone)
+39062040219 (Fax)

University of Rome Tor Vergata - Department of Management and Law ( email )

Rome
Italy

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