Erschienen in:Banque de France Working Paper ; No. 851
Umfang:
1 Online-Ressource (57 p)
Sprache:
Englisch
DOI:
10.2139/ssrn.3982197
Identifikator:
Entstehung:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments December 2021 erstellt
Beschreibung:
Using unique daily data on payment defaults to suppliers in France, we show how the trade credit channel amplified the Covid-19 shock, during the first months of the pandemic. It dramatically increased short-term liquidity needs in the most impacted downstream sectors: a one standard deviation increase in net trade credit position leads to a rise in the probability of default of up to a third. This effect is short-term and cyclical and is concentrated on financially constrained firms. We argue that taking into account the trade credit channel is critical to properly quantify liquidity shortfalls in crisis times