Bank Lending and Trade Credit: Evidence from Japanese General Trading Companies
0
조회
0
다운로드
0
인용
0
참고문헌
키워드
초록
This paper explores a financial role of Japanese general trading companies (GTCs), which act as a central point in a distribution network among group firms. I examine Meltzer’s conjecture, which holds that financially strong companies like GTCs increase trade receivables and reduce trade payables to shield their trading partners from a monetary squeeze. First, the panel estimation demonstrates that both trade receivables and trade payables decrease during periods of monetary tightness and increase during those of monetary ease. In other words, interfirm financing passing through a GTC’s balance sheet positively correlates with banking financing. Therefore, the Meltzer hypothesis does not hold for transactions between GTCs and all their trade partners. Instead, gross trade credit functions as a complement to macroeconomic bank lending. Second, I examine trade credit by dividing GTCs’ trading partners into related companies (i.e., subsidiaries and associate firms) and non-related companies. A major difference between related and non-related companies lies in the way in which trade receivables react to a GTC’s individual financial situation (that is, a firm’s individual interest expense rate minus a market’s interest rate). An increase in the interest gap induces a GTC to incur extra expenses over the market rate. In this situation, a GTC reduces trade receivables to non-related firms, but not those to related firms. This behavior eventually works as a shield, protecting their related companies from sharing the parent company’s interest costs. Finally, I investigate how trade credit differs in reaction to bank lending between tight and easy money periods. Although both trade receivables and trade payables decrease during periods of monetary tightness, GTCs reduce trade payables from related companies more than trade receivables to related companies at a statistically significant level. In this case, I conclude that the Meltzer effect works in terms of relative change
Abstract
This paper explores a financial role of Japanese general trading companies (GTCs), which act as a central point in a distribution network among group firms. I examine Meltzer’s conjecture, which holds that financially strong companies like GTCs increase trade receivables and reduce trade payables to shield their trading partners from a monetary squeeze. First, the panel estimation demonstrates that both trade receivables and trade payables decrease during periods of monetary tightness and increase during those of monetary ease. In other words, interfirm financing passing through a GTC’s balance sheet positively correlates with banking financing. Therefore, the Meltzer hypothesis does not hold for transactions between GTCs and all their trade partners. Instead, gross trade credit functions as a complement to macroeconomic bank lending. Second, I examine trade credit by dividing GTCs’ trading partners into related companies (i.e., subsidiaries and associate firms) and non-related companies. A major difference between related and non-related companies lies in the way in which trade receivables react to a GTC’s individual financial situation (that is, a firm’s individual interest expense rate minus a market’s interest rate). An increase in the interest gap induces a GTC to incur extra expenses over the market rate. In this situation, a GTC reduces trade receivables to non-related firms, but not those to related firms. This behavior eventually works as a shield, protecting their related companies from sharing the parent company’s interest costs. Finally, I investigate how trade credit differs in reaction to bank lending between tight and easy money periods. Although both trade receivables and trade payables decrease during periods of monetary tightness, GTCs reduce trade payables from related companies more than trade receivables to related companies at a statistically significant level. In this case, I conclude that the Meltzer effect works in terms of relative change
참고문헌 (35)
- Arellano, M, "Panel Data Econometrics" (2003), Oxford University Press
- Blackwell, "Estimation and Testing of Fixed-Effect Panel-Data Systems", The Stata Journal, 5(2), pp.202~207 (2005)
- Choi, W. G., "Trade Credit and the Effect of Macro-Financial Shocks: Evidence from U.S. Panel Data", Journal of Financial and Quantitative Analysis, 40(4), pp.897~925 (2005)
- Cunningham, R, "Trade Credit and Credit Rationing in Canadian Firms", Economic Analysis Research Paper Series No. 036, ~ (2005)
- Deloof, M., "Trade Credit, Product Quality, and Intragroup Trade: Some European Evidence", Financial Management, 25(3), pp.33~43 (1996)
- Emery, G. W., "Some Evidence on the Trade Credit Practices of Japanese Trading Companies", Advances in Pacific Basin Financial Markets 2B, 237~249 (1996)
- Flath, D., "The Japanese Economy" (2000), Oxford University Press
- "Nihon Shoken Keizai Kenkyujo", 1998
- Guariglia, A., "Credit Channel, Trade Credit Channel, and Inventory Investment: Evidence from a Panel of UK Firms", Journal of Banking and Finance, 30(10), pp.2835~2856 (2006)
- Hoshi, T, "The Japanese Firms: The Sources of Competitive Strength", pp.285~309 (1994), Oxford University Press
- Hoshi, T., "Japan’s Financial Crisis and Economic Stagnation", Journal of Economic Perspectives, 18(1), pp.3~26 (2004)
- Hoshi, T., "Corporate Structure, Liquidity and Investment: Evidence from Japanese Industrial Groups", Quarterly Journal of Economics, 106(1), pp.35~60 (1991)
- Im, K. S., "Testing for Unit Roots in Heterogeneous Panels", Journal of Econometrics, 115(1), pp.53~74 (2003)
- Kinyu-Zaisei, J. K., ", Vols 1-8, 8th Edition" (1996), Kinyu-Zaisei Jijyo Kenkyukai
- Trade Credit and the Monetary Transmission Mechanism, "Kohler, M.", ~, pp.Bank of England Working Paper No. 115 (2000)
- Levin, A., "Unit Root Tests in Panel Data: Asymptotic and Finite-Sample Properties", Journal of Econometrics, 108(1), pp.1~24 (2002)
- Marotta, G, "Does Trade Credit Redistribution Thwart Monetary Policy? Evidence from Italy", Applied Economics, 29(12), pp.1619~1629 (1997)
- European Economic Review, "Trade Credit, Bank Lending and Monetary Policy Transmission", European Economic Review, 50(3), pp.603~629 (2006)
- Meltzer, A. H, "Mercantile Credit, Monetary Policy, and Size of Firms", Review of Economics and Statistics, 42(4), pp.429~437 (1960)
- Nadiri, M. I, "The Determinants of Trade Credit in the U.S. Total Manufacturing Sector", Econometrica, 37(3), pp.408~423 (1969)
- Nerlove, M., "Optimal Advertising Policy under Dynamic Conditions", Economica, 12(114), pp.129~142 (1962)
- Newey, W., "Automatic Lag Selection in Covariance Matrix estimation", Review of Economic Studies, 61(4), pp.631~653 (1994)
- Nielsen, J. H., "Trade credit and the bank lending channel", Journal of Money, Credit, and Banking, 34(1), pp.226~253 (2002)
- Nishimura, H, (2009), Nihon Keizai Shimbunsha
- Ogawa, K, ". Chap. 5" (2003), Nihon Keizai Shimbunsha
- Oliner, S. D., "Monetary policy and credit conditions: Evidence from the composition of external finance: Comment", American Economic Review, 86(1), pp.300~309 (1996)
- Ono, M, "Determinants of trade credit in the Japanese manufacturing sector", Journal of the Japanese and International Economies, 15(2), pp.160~177 (2001)
- Ramey, V. A, "The source of fluctuations in money: Evidence from trade credit", Journal of Monetary Economics, 30(2), pp.171~193 (1992)
- Giornale degli Economisti e Annali di Economia, "Firms’ financial and real responses to monetary tightening: Evidence for large and small Italian companies", Giornale degli Economisti e Annali di Economia, 57(1), pp.35~64 (1998)
- Sasago, K, (1979), Kyoikusha
- Sheard, P, "The Japanese general trading company as an aspect of interfirm risk-sharing", Journal of the Japanese and International Economies, 3(3), pp.308~322 (1989)
- Toyo Keizai Data Bank, (1996), Toyokeizai-Shimposha
- "Uesugi, I", ~, pp.RIETI Discussion Paper Series 04-J-041. (2004)
- Uesugi, I., "Trading company finance in Japan", International Journal of Business, 11(1), pp.63~80 (2006)
- Van Nieuwkerk, M, "Trade credit and monetary policy in the Netherlands", pp.533~551 (1975), Econometric Research in European Central Banks