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Korean J Financ Stud > Volume 47(3); 2018 > Article
Korean Journal of Financial Studies 2018;47(3):379-409.
DOI: https://doi.org/10.26845/KJFS.2018.06.47.3.379    Published online June 30, 2018.
Trade Credit in the Korean Market : Determinants and Effects on Firm Value
Mujeong Park, Sangjeon Han, Noolee Kim
기업간 신용거래에 대한 실증연구
박무정, 한상전, 김누리
1한국무역보험공사
2한양대학교
Abstract
This study examines the trade credit in the Korean market. Specifically we conduct research on the determinants of trade credit and its effects on firm value using Korean firm level data from the supplier firms’ perspective. The empirical results show that supplier firms with higher capacity for and lower costs of trade credit provision provide more trade credit, which support the financing motives of trade credit. Also, we find that firms with lower market share provide more trade credit in order to promote sales as conjectured by the operating motive. However, firms with longer production cycle tend to provide less trade credit, which contradict the operating motive theory’s implication. On the other hand, the price discrimination motive and transaction costs reduction motive of trade credit are not supported by the empirical results. For the effects of trade credit on firm value, we find non-linear relation between the two. Specifically, empirical results show that there is an inverse-U-shape relation between trade credit and firm value, which states a positive relation to a certain point and a negative relation beyond it. These results suggest that an optimal level of trade credit maximizing firm value exists and firm value can be improved by increasing the supply of trade credit in case of underinvestment in trade credit.
Key Words: 신용거래,매출채권,신용공여,결정요인,기업가치,Trade Credit,Account Receivable,Credit Provision,Determinants,Firm Value
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