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Abstract

Using data on over 5,500 Ethiopian retailers, we document that there is lower use of trade credit in areas with more access to bank finance. Among firms within an area, although receiving trade credit increases the use of a bank loan by informal firms, it has no association with the use of bank loans for formal firms. This result suggests that financial relationships with other firms acts as a signal of creditworthiness for informal firms which are usually more credit constrained due to agency problems.

Publication Type:	Article
Additional Information:	This is a pre-copyedited, author-produced version of an article accepted for publication in Journal of African Economies following peer review. The version of record Thorsten Beck, Mohammad Hoseini, Burak Uras, Trade Credit and Access to Finance: Evidence from Ethiopian Retailers, Journal of African Economies, Volume 29, Issue 2, March 2020, Pages 146–172, is available online at: https://doi.org/10.1093/jae/ejz018
Subjects:	D History General and Old World > DT Africa H Social Sciences > HG Finance H Social Sciences > HJ Public Finance
Departments:	Bayes Business School > Finance
SWORD Depositor:	Symplectic Administrator

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