Trade credit, quality guarantees, and product marketability.
Date
1993-11
Journal Title
Journal ISSN
Volume Title
Publisher
Wiley [Commercial Publisher] ; Financial Management Association International [Associate Organisation]
YU Faculty Profile
Abstract
Although trade credit has long been an important source of financing for corporations, it is one of the least understood methods of doing business. One possible reason for misconceptions about trade credit is that it is not primarily financial in nature, but instead reflects production and marketing decisions. In this paper, we consider trade credit as a way that firms can guarantee product quality, rather than as a means of financing less creditworthy firms. In this context, we seek, and provide, possible explanations for observed phenomena such as relatively shorter (or no) trade credit terms for consumer and food products and relatively longer terms for heavy industrial equipment.
Description
Scholarly article / Open Access
Keywords
Trade credit, financing for corporations
Citation
Ravid, S.A., Long, M. & Malitz, I.B. (1993, November). Trade credit, quality guarantees, and product marketability. Financial Management, 22(4), DOI: 10.2307/3665582