Society and Economy
Volume/Issue:
Volume 36: Issue 4
Impact of the 2008 financial crisis on corporate trade finance
Author:
Herbert Broens University of Pécs Faculty of Business and Economics Pécs Hungary

Search for other papers by Herbert Broens in
Current site
Google Scholar
PubMed Close
Pages:
511–528
Online Publication Date:
21 Nov 2014
Publication Date:
01 Dec 2014
Article Category:
Research Article
DOI:
https://doi.org/10.1556/socec.36.2014.4.4
Keywords:
trade credit; trade finance; credit scoring; working capital
Restricted access

Trade finance plays a significant role in the global trade of merchandise, which witnessed a sharp fall in late 2008 and early 2009. Firms across the world experienced restricted access to bank credit in the wake of the financial crisis, and this had a considerable impact on the operation and growth of their businesses. The financial crisis led to a contagion on trade finance and product sellers’ payment terms. Furthermore, corporate trade credit is a potential alternative to institutional financing that serves as an important source of finance. Corporate trade finance represents an important part of short-term financing for firms, especially during financial crises. This paper evaluates the impact of the increased use of corporate trade finance in two unique portfolios of production firms during the financial crisis. All have an active treasury organization. The analysis demonstrates the impact of the financial crisis on corporate trade credit demographically. Furthermore, it uses financial performance and working capital data of other German stock-listed production firms. It analyses how developments or changes in working capital impact a firm’s sales growth, EBIT interest, tangible net and EBITDA margin, and total asset worth.

  • Altman, E. I. — Saunders, A. (1998): Credit Risk Measurement: Developments over the Last 20 Years. Journal of Banking & Finance 21: 1721–1742.

    Saunders A. , 'Credit Risk Measurement: Developments over the Last 20 Years ' (1998 ) 21 Journal of Banking & Finance : 1721 -1742 .

    • Search Google Scholar

  • Arnold, A. R. (2010): Economics. Cengage Learning.

    Arnold A. R. , '', in Economics , (2010 ) -.

  • Auboin, M. (2009): Boosting the Availability of Trade Finance in the Current Crisis: Background Analysis for a Substantial G20 Package, Centre for Economic Policy Research Policy Insight No. 35.

    Auboin M. , '', in Centre for Economic Policy Research Policy Insight No. 35 , (2009 ) -.

  • Bastos, R. — Pindado, J. (2013): Trade Credit during a Financial Crisis: APanel Data Analysis. Journal of Business Research 66(5): 614–620.

    Pindado J. , 'Trade Credit during a Financial Crisis: APanel Data Analysis ' (2013 ) 66 Journal of Business Research : 614 -620 .

    • Search Google Scholar

  • Baum, C. F. — Caglayan, M. — Ozkan, N. (2003): The Role of Uncertainty in the Transmission of Monetary Policy Effects on Bank Lending. Boston College Working Papers in Economics 561.

    Ozkan N. , '', in Boston College Working Papers in Economics 561 , (2003 ) -.

  • Biasis, B. — Gollier, C. (1997): Trade Credit and Credit Rationing. Review of Financial Studies 10: 903–937.

    Gollier C. , 'Trade Credit and Credit Rationing ' (1997 ) 10 Review of Financial Studies : 903 -937 .

    • Search Google Scholar

  • Boissay, F. — Gropp, R. (2007): Trade Credit Defaults and Liquidity Provision by Firms. Goethe-Universität Fachbereich Wirtschaftswissenschaften, Working paper series No. 179.

    Gropp R. , '', in Goethe-Universität Fachbereich Wirtschaftswissenschaften, Working paper series No. 179 , (2007 ) -.

  • Brealey, R. A. — Myers, S. C. — Marcus, A. J. (2009): Fundamentals of Corporate Finance, 6th edition. New York: McGraw-Hill/Irwin.

    Marcus A. J. , '', in Fundamentals of Corporate Finance , (2009 ) -.

  • Brennan, M. — Vojislav, M. — Zechner, J. (1988): Vendor Financing. The Journal of Finance 43(5): 1127–1141.

    Zechner J. , 'Vendor Financing ' (1988 ) 43 The Journal of Finance : 1127 -1141 .

  • Brick, E. I. — Fung, W. K. H. (1984): Taxes and the Theory of Trade Debt. Journal of Finance 39: 1169–1176.

    Fung W. K. H. , 'Taxes and the Theory of Trade Debt ' (1984 ) 39 Journal of Finance : 1169 -1176 .

    • Search Google Scholar

  • Bricogne, J. C. — Fontagné, L. — Gaulier, G. — Taglioni, D. — Vicard, V. (2012): Firms and the Global Crisis: French Exports in the Turmoil. Journal of International Economics 87(1): 134–146.

    Vicard V. , 'Firms and the Global Crisis: French Exports in the Turmoil ' (2012 ) 87 Journal of International Economics : 134 -146 .

    • Search Google Scholar

  • Burkart, M. — Ellingsen, T. (2004): In-Kind Finance: ATheory of Trade Credit. American Economic Review 94: 569–590.

    Ellingsen T. , 'In-Kind Finance: ATheory of Trade Credit ' (2004 ) 94 American Economic Review : 569 -590 .

    • Search Google Scholar

  • Chauffour, J. — Farole, T. (2009): Trade Finance in Crisis Market Adjustment or Market Failure? World Bank Policy Research Working Paper 5003.

    Farole T. , '', in World Bank Policy Research Working Paper 5003 , (2009 ) -.

  • Chor, D. — Manova, K. (2012): Off the Cliff and Back? Credit Conditions and International Trade during the Global Financial Crisis. Journal of International Economics 87(1): 117–133.

    Manova K. , 'Off the Cliff and Back? Credit Conditions and International Trade during the Global Financial Crisis ' (2012 ) 87 Journal of International Economics : 117 -133 .

    • Search Google Scholar

  • Croughy, M. — Mark, R. (1998): A Comparative Analysis of Current Credit Risk Models, Paper presented at the conference Credit Modelling and Regulatory Implications, London.

    Mark R. , '', in Paper presented at the conference Credit Modelling and Regulatory Implications, London , (1998 ) -.

  • Danielson, M. G. — Scott, J. A. (2004): Bank Loan Availability and Trade Credit Demand. The Financial Review 39: 579–600.

    Scott J. A. , 'Bank Loan Availability and Trade Credit Demand ' (2004 ) 39 The Financial Review : 579 -600 .

    • Search Google Scholar

  • Delannay, A. F. — Weill, L. (2004): The Determinants of Trade Credit in Transition Countries. Economics of Planning 37: 173–193.

    Weill L. , 'The Determinants of Trade Credit in Transition Countries ' (2004 ) 37 Economics of Planning : 173 -193 .

    • Search Google Scholar

  • Deloof, M. — Overfelt, W. V. (2010): Trade Credit and Bank Relationships: Evidence from Pre-World War I Belgium, Applied Economics 43(13): 1647–1655.

    Overfelt W. V. , 'Trade Credit and Bank Relationships: Evidence from Pre-World War I Belgium ' (2010 ) 43 Applied Economics : 1647 -1655 .

    • Search Google Scholar

  • Eck, K. — Engemann, M. — Schnitzer, M. (2012): How Trade Credits Foster International Trade. CEPR Discussion Papers 8954.

    Schnitzer M. , '', in CEPR Discussion Papers 8954 , (2012 ) -.

  • Emery, G. W. (1984): A Pure Financial Explanation for Trade Credit. Journal of Financial and Quantitative Analysis 19: 271–285.

    Emery G. W. , 'A Pure Financial Explanation for Trade Credit ' (1984 ) 19 Journal of Financial and Quantitative Analysis : 271 -285 .

    • Search Google Scholar

  • Fukuda, S. — Kasuya, M. — Akashi, K. (2006): The Role of Trade Credit for Small Firms: An Implication from Japan’s Banking Crisis. CEI Working Paper No. 2006-9.

    Akashi K. , '', in CEI Working Paper No. 2006-9 , (2006 ) -.

  • Giannetti, M. — Burkart, M. — Ellingsen, T. (2011): What You Sell is What You Lend? Explaining Trade Credit Contracts. Review of Financial Studies 24: 1261–1298.

    Ellingsen T. , 'What You Sell is What You Lend? Explaining Trade Credit Contracts ' (2011 ) 24 Review of Financial Studies : 1261 -1298 .

    • Search Google Scholar

  • Gordy, M. (2000): A Comparative Anatomy of Credit Risk Models. Journal of Banking and Finance 24(1/2): 119–149.

    Gordy M. , 'A Comparative Anatomy of Credit Risk Models ' (2000 ) 24 Journal of Banking and Finance : 119 -149 .

    • Search Google Scholar

  • Iacovone, L. — Zavacka, V. (2009): Banking Crises and Exports: Lessons from the Past. World Bank Policy Research Working Paper Series 5016.

    Zavacka V. , '', in World Bank Policy Research Working Paper Series 5016 , (2009 ) -.

  • ICC (2011): ICC Global Trade and Finance Survey 2011. http://www.iccwbo.org/Products-and-Services/Trade-facilitation/ICC-Global-Survey-on-Trade-Finance/, accessed 28 July 2014.

    '', in ICC Global Trade and Finance Survey , (2011 ) -.

  • Jijie, T. — Bobalca, C. (2009): Beyond Credibility: Scale Development for Measuring a Candidate’s Profile. Transformations in Business & Economics 8(3): 244–254.

    Bobalca C. , 'Beyond Credibility: Scale Development for Measuring a Candidate’s Profile ' (2009 ) 8 Transformations in Business & Economics : 244 -254 .

    • Search Google Scholar

  • Kazmin, A. — Lamont, J. — Leah, J. (2008): India in Emergency Step to Unblock Trade Credit. Financial Times November 17.

    Leah J. , '', in Financial Times , (2008 ) -.

  • Klapper, L. — Amit, R. — Guillen, M. (2010): Entrepreneurship and Firm Formation across Countries. In: Lerner, J. — Schoar, A. (eds): NBER Volume on International Differences in Entrepreneurship. Chicago: University of Chicago Press.

    Guillen M. , '', in NBER Volume on International Differences in Entrepreneurship , (2010 ) -.

  • Lakstutiene, A. — Breiteryte, A. — Rumsaite, D. (2009): Stress Testing of Credit Risk Lithuania Banks under Simulated Economic Crisis Environment Conditions. Engineering Economics (5): 15–24.

    Rumsaite D. , 'Stress Testing of Credit Risk Lithuania Banks under Simulated Economic Crisis Environment Conditions ' (2009 ) 5 Engineering Economics : 15 -24 .

    • Search Google Scholar

  • Lindemane, M. (2010): The Influence of Global Crisis on Trade in Financial Services. Journal of Business Management 3.

  • Liu, Y (2002): A Framework of data Mining Application Process for Credit Scoring. Georg-August- Universität Göttingen Institut für Wirtschaftsinformatik Working Paper Nr. 01/2002.

    Liu Y. , '', in Georg-August- Universität Göttingen Institut für Wirtschaftsinformatik Working Paper , (2002 ) -.

  • Love, I. — Zaidi, R. (2010): Trade Credit, Bank Credit and Financial Crisis. International Review of Finance 10(1): 125–147.

    Zaidi R. , 'Trade Credit, Bank Credit and Financial Crisis ' (2010 ) 10 International Review of Finance : 125 -147 .

    • Search Google Scholar

  • Love, I. — Preve, L. A. — Sarria-Allende, V. (2007): Trade Credit and Bank Credit: Evidence from Recent Financial Crises. Journal of Financial Economics 83: 453–469.

    Sarria-Allende V. , 'Trade Credit and Bank Credit: Evidence from Recent Financial Crises ' (2007 ) 83 Journal of Financial Economics : 453 -469 .

    • Search Google Scholar

  • Marotta, G. (1997): Does Trade Credit Redistribution Thwart Monetary Policy? Evidence from Italy. Applied Economics 29(12): 1619–1629.

    Marotta G. , 'Does Trade Credit Redistribution Thwart Monetary Policy? Evidence from Italy ' (1997 ) 29 Applied Economics : 1619 -1629 .

    • Search Google Scholar

  • Marotta, G. (2005): When do Trade Credit Discounts Matter? Evidence from Italian Firm-level Data. Applied Economics 37: 403–416.

    Marotta G. , 'When do Trade Credit Discounts Matter? Evidence from Italian Firm-level Data ' (2005 ) 37 Applied Economics : 403 -416 .

    • Search Google Scholar

  • Meltzer, A. H. (1960): Mercantile Credit, Monetary Policy, and Size of Firms. The Review of Economics and Statistics 42(4): 429–437.

    Meltzer A. H. , 'Mercantile Credit, Monetary Policy, and Size of Firms ' (1960 ) 42 The Review of Economics and Statistics : 429 -437 .

    • Search Google Scholar

  • Mileris, R. — Boguslauskas, V. (2010): Data Reduction Influence on the Accuracy of Credit Risk Estimation Models. Engineering Economics 21(1): 5–11.

    Boguslauskas V. , 'Data Reduction Influence on the Accuracy of Credit Risk Estimation Models ' (2010 ) 21 Engineering Economics : 5 -11 .

    • Search Google Scholar

  • Mileris, R. — Boguslauskas, V. (2011): Credit Risk Estimation Model Development Process: Main Steps and Model Improvement. Engineering Economics 22(2): 126–133.

    Boguslauskas V. , 'Credit Risk Estimation Model Development Process: Main Steps and Model Improvement ' (2011 ) 22 Engineering Economics : 126 -133 .

    • Search Google Scholar

  • Nilsen, J. H. (2002): Trade Credit and the Bank Lending Channel. Journal of Money, Credit, and Banking 34(1): 226–253.

    Nilsen J. H. , 'Trade Credit and the Bank Lending Channel ' (2002 ) 34 Journal of Money, Credit, and Banking : 226 -253 .

    • Search Google Scholar

  • Petersen, M., — Rajan, R. (1997): Trade Credit: Theories and Evidence. The Review of Financial Studies 10(3): 661–691.

    Rajan R. , 'Trade Credit: Theories and Evidence ' (1997 ) 10 The Review of Financial Studies : 661 -691 .

    • Search Google Scholar

  • Schwartz, R. A. (1974): An Economic Model of Trade Credit. Journal of Financial and Quantitative Analysis 9(4): 643–657.

    Schwartz R. A. , 'An Economic Model of Trade Credit ' (1974 ) 9 Journal of Financial and Quantitative Analysis : 643 -657 .

    • Search Google Scholar

  • Smith, J. K. (1987): Trade Credit and Informational Asymmetry. The Journal of Finance 42: 863–872.

    Smith J. K. , 'Trade Credit and Informational Asymmetry ' (1987 ) 42 The Journal of Finance : 863 -872 .

    • Search Google Scholar

  • Uesugi, K. S. — Yamashiro, G. M. (2008): The Effectiveness of Public Credit Guarantees in the Japanese Loan Market. PIE/CIS Discussion Paper No. 400.

    Yamashiro G. M. , '', in The Effectiveness of Public Credit Guarantees in the Japanese Loan Market , (2008 ) -.

  • Wilner, B. (2000): The Exploitation of Relationships in Financial Distress: The Case of Trade Credit. The Journal of Finance 55(1): 153–178.

    Wilner B. , 'The Exploitation of Relationships in Financial Distress: The Case of Trade Credit ' (2000 ) 55 The Journal of Finance : 153 -178 .

    • Search Google Scholar
  • Collapse
  • Expand
Cover Society and Economy
Society and Economy
Print ISSN:
1588-9726
Online ISSN:
1588-970X

Editor-in-chief: Balázs SZENT-IVÁNYI

Co-Editors:

  • Péter MARTON (Corvinus University, Budapest)
  • István KÓNYA (Corvinus University, Budapest)
  • László SAJTOS (The University of Auckland)
  • Gábor VIRÁG (University of Toronto)

Associate Editors:

  • Tamás BOKOR (Corvinus University, Budapest)
  • Sándor BOZÓKI (Corvinus University Budapest)
  • Bronwyn HOWELL (Victoria University of Wellington)
  • Hintea CALIN (Babeş-Bolyai University)
  • Christian EWERHART (University of Zürich)
  • Clemens PUPPE (Karlsruhe Institute of Technology)
  • Zsolt DARVAS (Bruegel)
  • Szabina FODOR (Corvinus University Budapest)
  • Sándor GALLAI (Corvinus University Budapest)
  • László GULÁCSI (Óbuda University)
  • Dóra GYŐRFFY (Corvinus University Budapest)
  • György HAJNAL (Corvinus University Budapest)
  • Krisztina KOLOS (Corvinus University Budapest)
  • Alexandra KÖVES (Corvinus University Budapest)
  • Lacina LUBOR (Mendel University in Brno)
  • Péter MEDVEGYEV (Corvinus University Budapest)
  • Miroslava RAJČÁNIOVÁ (Slovak University of Agriculture)
  • Ariel MITEV (Corvinus University Budapest)
  • Éva PERPÉK (Corvinus University Budapest)
  • Petrus H. POTGIETER (University of South Africa)
  • Sergei IZMALKOV (MIT Economics)
  • Anita SZŰCS (Corvinus University Budapest)
  • László TRAUTMANN (Corvinus University Budapest)
  • Trenton G. SMITH (University of Otago)
  • György WALTER (Corvinus University Budapest)
  • Zoltán CSEDŐ (Corvinus University Budapest)
  • Zoltán LŐRINCZI (Ministry of Human Capacities)

Society and Economy
Institute: Corvinus University of Budapest
Address: Fővám tér 8. H-1093 Budapest, Hungary
Phone: (36 1) 482 5406
E-mail: balazs.szentivanyi@uni-corvinus.hu

Indexing and Abstracting Services:

  • CABELLS Journalytics
  • DOAJ
  • International Bibliographies IBZ and IBR
  • International Political Science Abstracts
  • JSTOR
  • SCOPUS
  • RePEc
  • Referativnyi Zhurnal

 

2023  
Scopus  
CiteScore 1.5
CiteScore rank Q2 (Sociology and Political Science)
SNIP 0.496
Scimago  
SJR index 0.243
SJR Q rank Q3

Society and Economy
Publication Model Gold Open Access
Submission Fee none
Article Processing Charge 900 EUR/article with enough waivers
Regional discounts on country of the funding agency World Bank Lower-middle-income economies: 50%
World Bank Low-income economies: 100%
Further Discounts Sufficient number of full waiver available. Editorial Board / Advisory Board members: 50%
Corresponding authors, affiliated to an EISZ member institution subscribing to the journal package of Akadémiai Kiadó: 100%
Subscription Information Gold Open Access

Society and Economy
Language English
Size B5
Year of
Foundation		 1972
Volumes
per Year		 1
Issues
per Year		 4
Founder Budapesti Corvinus Egyetem
Founder's
Address		 H-1093 Budapest, Hungary Fővám tér 8.
Publisher Akadémiai Kiadó
Publisher's
Address		 H-1117 Budapest, Hungary 1516 Budapest, PO Box 245.
Responsible
Publisher		 Chief Executive Officer, Akadémiai Kiadó
ISSN 1588-9726 (Print)
ISSN 1588-970X (Online)

Monthly Content Usage

Abstract Views Full Text Views PDF Downloads
Oct 2024 117 0 0
Nov 2024 22 0 0
Dec 2024 14 0 0
Jan 2025 34 0 0
Feb 2025 46 0 0
Mar 2025 30 0 0
Apr 2025 0 0 0