Credit Chains and Sectoral Comovement : Does the Use of Trade Credit Amplify Sectoral Shocks?

This paper provides evidence of the presence and relevance of the credit chain propagation and amplification mechanism described by Kiyotaki and Moore (1997) by looking at its implications for the correlation of industries. In particular, it tests the hypothesis that an increase in the use of trade...

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Bibliographic Details
Main Author:	Raddatz, Claudio
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Business Fluctuations Cycles E320 Financing Policy Financial Risk and Risk Management Capital and Ownership Structure G320 Transactional Relationships Contracts and Reputation Networks L140 Industry Studies: Manufacturing: General L600
Online Access:	http://hdl.handle.net/10986/4855

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recordtype	oai_dc
spelling	okr-10986-48552021-04-23T14:02:19Z Credit Chains and Sectoral Comovement : Does the Use of Trade Credit Amplify Sectoral Shocks? Raddatz, Claudio Business Fluctuations Cycles E320 Financing Policy Financial Risk and Risk Management Capital and Ownership Structure G320 Transactional Relationships Contracts and Reputation Networks L140 Industry Studies: Manufacturing: General L600 This paper provides evidence of the presence and relevance of the credit chain propagation and amplification mechanism described by Kiyotaki and Moore (1997) by looking at its implications for the correlation of industries. In particular, it tests the hypothesis that an increase in the use of trade credit, along the input-output chain linking two industries, results in an increase in their output correlation using detailed data on the correlations and input-output relations of 378 manufacturing industry pairs across 43 countries with different degrees of use of trade credit. The results provide strong support for this hypothesis and indicate that the mechanism is quantitatively relevant. 2012-03-30T07:30:04Z 2012-03-30T07:30:04Z 2010 Journal Article Review of Economics and Statistics 00346535 http://hdl.handle.net/10986/4855 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Business Fluctuations Cycles E320 Financing Policy Financial Risk and Risk Management Capital and Ownership Structure G320 Transactional Relationships Contracts and Reputation Networks L140 Industry Studies: Manufacturing: General L600
spellingShingle	Business Fluctuations Cycles E320 Financing Policy Financial Risk and Risk Management Capital and Ownership Structure G320 Transactional Relationships Contracts and Reputation Networks L140 Industry Studies: Manufacturing: General L600 Raddatz, Claudio Credit Chains and Sectoral Comovement : Does the Use of Trade Credit Amplify Sectoral Shocks?
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	This paper provides evidence of the presence and relevance of the credit chain propagation and amplification mechanism described by Kiyotaki and Moore (1997) by looking at its implications for the correlation of industries. In particular, it tests the hypothesis that an increase in the use of trade credit, along the input-output chain linking two industries, results in an increase in their output correlation using detailed data on the correlations and input-output relations of 378 manufacturing industry pairs across 43 countries with different degrees of use of trade credit. The results provide strong support for this hypothesis and indicate that the mechanism is quantitatively relevant.
format	Journal Article
author	Raddatz, Claudio
author_facet	Raddatz, Claudio
author_sort	Raddatz, Claudio
title	Credit Chains and Sectoral Comovement : Does the Use of Trade Credit Amplify Sectoral Shocks?
title_short	Credit Chains and Sectoral Comovement : Does the Use of Trade Credit Amplify Sectoral Shocks?
title_full	Credit Chains and Sectoral Comovement : Does the Use of Trade Credit Amplify Sectoral Shocks?
title_fullStr	Credit Chains and Sectoral Comovement : Does the Use of Trade Credit Amplify Sectoral Shocks?
title_full_unstemmed	Credit Chains and Sectoral Comovement : Does the Use of Trade Credit Amplify Sectoral Shocks?
title_sort	credit chains and sectoral comovement : does the use of trade credit amplify sectoral shocks?
publishDate	2012
url	http://hdl.handle.net/10986/4855
_version_	1764393008409608192

Credit Chains and Sectoral Comovement : Does the Use of Trade Credit Amplify Sectoral Shocks?

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