Trade credit, financial intermediary development and industry growth
Open accessAbstract
Recent work suggests that financial development is important for economic growth, since financial markets more effectively allocate capital to firms with high value projects. For firms in poorly developed financial markets, implicit borrowing in the form of trade credit may provide an alternative source of funds. We show that industries with higher dependence on trade credit financing exhibit higher rates of growth in countries with weaker financial institutions. Furthermore, consistent with barriers to trade credit access among young firms, we show that most of the effect that we report comes from growth in the size of preexisting firms.
Integrity signals
Registry
Cites
Statistics
Claims the paper makes
Claims other papers make about this one
Each is checked against this paper’s own text: does it say what the citing paper says it does?
Industries with higher dependence on trade credit financing exhibit higher growth rates in countries with relatively weak financial institutions.
“Fisman and Love (2003a) focus on access to trade credit rather than bank credit and find that industries with higher dependence on trade credit financing exhibit higher growth rates in countries with relatively weak financial institutions.”
From Entry regulation as a barrier to entrepreneurship (2006) · cites this paper as Fisman and Love (2003a)
Cites
A transactions theory of trade credit use
Ferris, J. S. (1981) · The Quarterly Journal of Economics · doi:10.2307/1882390 · Cited by 603 · see citing works
Flagged first, then by citations
Cited by
Sorted by citations
Chapter 12 Finance and Growth: Theory and Evidence
Levine, R. (2005) · Handbook of Economic Growth · doi:10.1016/s1574-0684(05)01012-9 · Cited by 2,889 · see citing works
Entry regulation as a barrier to entrepreneurship
Klapper, L., Laeven, L., & Rajan, R. (2006) · Journal of Financial Economics · doi:10.1016/j.jfineco.2005.09.006 · Cited by 1,723 · see citing works
Financial development, property rights, and growth
Claessens, S., & Laeven, L. (2003) · The Journal of Finance · doi:10.1046/j.1540-6261.2003.00610.x · Cited by 338 · see citing works
Finance, Growth, and Inequality
Levine, R. (2021) · IMF Working Papers · doi:10.5089/9781513583365.001 · Cited by 62 · see citing works
- Authors
- Fisman, R., & Love, I.
- Affiliations
- National Bureau of Economic Research (US)
- Corresponding author
- Love, Inessa
- Venue
- The Journal of Finance
- Publisher
- Wiley
- Published
- 2003-02
- Volume
- 58
- Issue
- 1
- Pages
- 353-374
- ISSN
- 0022-1082 (ISSN-L)
- 1540-6261
- OpenAlex
- W3124834107
- Cited by
- 1,052
- References
- 1
- Citations by year
- 2026: 78 · 2025: 88 · 2024: 73 · 2023: 67 · 2022: 76 · 2021: 51 · 2020: 53 · 2019: 48 · 2018: 67 · 2017: 42 · 2016: 40 · 2015: 39 · 2014: 43 · 2013: 44 · 2012: 49
- FWCI
- 64.06
- Type
- journal article
- Language
- en
- Open access
- bronze
- doi.org
- Locations
- The Journal of Finance (publishedVersion)
- Topics
- Social Sciences › Business, Management and Accounting › Accounting › Working Capital and Financial Performance
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Monetary Policy and Economic Impact
- Social Sciences › Business, Management and Accounting › Accounting › Corporate Finance and Governance
- Keywords
- trade credit, financial development, economic growth, financial institutions, firm size, young firms, capital allocation, industry growth
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
Are you an author, or do you see a problem with this page? Request a review
