Trade Credit and Informational Asymmetry.
Smith, Janet Kiholm;
- Journal: Journal of Finance,volume 42,issue 4 September,pages863-72
- Subject:acm: ComputingMilieux_COMPUTERSANDSOCIETY
Commonly used trade credit terms implicitly define a high interest rate that operates as an efficient screening device where information about buyer default risk is asymmetrically held. By offering trade credit, a seller can identify prospective defaults more quickl y t... View more
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