Author(s): Pinto, Pedro ; Henriques, Carla ; Cardoso, Carolina Esteves Oliveira da Silva ; Neves, Maria Elisabete Duarte
Date: 2023
Persistent ID: http://hdl.handle.net/10400.19/7978
Origin: Repositório Científico do Instituto Politécnico de Viseu
Subject(s): SMEs; Bank credit; Trade credit; Financial crisis; Credit constraints
Small companies face significant difficulties in accessing finance, and the use of bank credit and trade credit are the primary sources of financing, specifically in small countries, with little market liquidity, and focused on the banking system, as is the case of Portugal. The main objective of this article is to identify significant drivers of bank and trade credit, as well as investigate the complementary or substitutive relationship between them, considering that both constitute an essential source of financing for small and medium-sized enterprises (SMEs). The sample comprises 5860 companies, and the analysis was performed using panel data methodology (2010–2019). The results suggest that, during the period in which the financial crisis was most felt in the country (2010–2013), companies intensified their demand for trade credit, and in the following years for bank credit. Our evidence does support the substitution hypothesis between trade and bank credit.
