Financial Contracting and Organizational Form: Evidence from the Regulation of Trade Credit

• 成果类型: Article
• 署名作者: Breza, Emily; Liberman, Andres
• 署名单位: Columbia University; New York University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12439
• 发表日期: 2017
• 页码: 291-323
• 关键词: FIRM BOUNDARIES; integration; COSTS; OWNERSHIP

摘要

We present evidence that restrictions to the set of feasible financial contracts affect buyer-supplier relationships and the organizational form of the firm. We exploit a regulation that restricted the maturity of the trade credit contracts that a large retailer could sign with some of its small suppliers. Using a within-product difference-indifferences identification strategy, we find that the restriction reduces the likelihood of trade by 11%. The retailer also responds by internalizing procurement to its own subsidiaries and reducing overall purchases. Finally, we find that relational contracts can mitigate the inability to extend long trade credit terms.