Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/299296 
Year of Publication: 
2024
Series/Report no.: 
Sveriges Riksbank Working Paper Series No. 435
Publisher: 
Sveriges Riksbank, Stockholm
Abstract: 
Buyers and suppliers have diverging interests about trade-credit maturities: buyers desire long payment periods as a source of cheap funding, while suppliers prefer swift payments to avoid locking up scarce liquidity in idle assets. A fast-growing financial product innovation - supply-chain finance (SCF) - offers to resolve these diverging interests, but its net effect on suppliers is a priori unclear. We study the effects of SCF programs on suppliers using unique invoice-level data from a large Swedish bank. We find that SCF programs relax suppliers' liquidity constraints and thereby enable them to grow their sales, employment, and investments.
Subjects: 
Trade credit
supply-chain finance
reverse factoring
financial constraints
JEL: 
G21
G32
D22
Document Type: 
Working Paper

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