TRADE CREDIT IN ITALY: FINANCING TO SELL

Abstract

The analysis considers Italian SMEs and investigates, over the years 2006-2011, the existence of interdependencies between trade credit policy and trade debt policy and the co-existence of conditions of complementarity and substitutability between trade credit and other financing sources. Linear regression models on a yearly basis are used and these models are put under observation for six years.The paper shows that there are interdependencies between trade credit policy and trade debt policy; trade credit can be a complementary and substitute source of financing to bank loans; conditions of substitutability and complementarity can also be observed by considering separately firms involved in agricultural or industrial activities and firms that perform services.