Payment Practices Transparency and Customer-Supplier Dynamics

• 成果类型: Article
• 署名作者: Grewal, Jody; Mohan, Aditya; Perez-cavazos, Gerardo
• 署名单位: University of Toronto; University of California System; University of California San Diego
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/1475-679X.12521
• 发表日期: 2024
• 页码: 635-674
• 关键词: trade credit; Disclosure regulation; INFORMATION; FIRMS; POWER

摘要

We exploit the introduction of the Payment Practices Disclosure Regulation in the United Kingdom (UK) to examine the effects of mandating disclosure of customer-supplier payment practices. We find that nondisclosing small and medium-sized enterprises (SMEs) experience a reduction in their accounts receivable by 8.3%, consistent with an acceleration of their trade credit collections. Further, SMEs exhibit fewer financial constraints after the regulation. We survey managers from large firms and SMEs to understand the underlying mechanisms. The required disclosures raise large firms' reputational concerns and shift the bargaining power between large firms and SMEs. Additionally, the new disclosures compel executives at large firms to scrutinize their own firms' payment practices, leading to increased accountability and a stronger focus on timely payment among senior managers.