Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments September 18, 2012 erstellt
Description:
In this paper we analyze how firms that extend trade credit finance and operate the generated accounts receivable. Firms decide whether to internally manage the trade credit, use full-service factoring or enter into an inhouse factoring contract. Our model is mainly based on a theory of the firm that stresses the need for financing, the supplier's risk and the financial flexibility. We find that high risk firms with a strong need for short term financing and restricted access to bank credit enter into a market transaction such as a full-service or inhouse factoring contract. Larger firms tend to manage the accounting and debt collection of the accounts receivable on their own and thus prefer inhouse factoring whereas small firms rely on full-service factoring. Financial diversification in terms of independence from banks plays an important role for the decision to employ a factor