The Exploitation of Relationships in Financial Distress : The Case of Trade Credit  

Oleh:

Wilner, Benjamin S.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 55 no. 1 (2000), page 153-178.
Topik: relationships; commercial credit; interest rates; prices; mathematical models; studies
Fulltext: p 153.pdf (221.01KB)

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88.1 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

This paper develops optimal pricing, lending and renegotiation strategies for companies in relationships where one firm is highly dependent on the other. Long - term trade - creditor firm relationships induce dependent trade creditors to grant more concessions in debt renegotiations than nondependent creditors. Anticipating these larger renegotiation concessions, not only do less financially stable firms prefer trade credit, but all firms agree to pay a higher interest rate for trade credit. The model also explains the existence of "teaser" interest rates and convenience classes. Findings are consistent with those of the relationship - lending literature.

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