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

This paper provides evidence of the presence and relevance of a credit-chain amplification mechanism by looking at its implications for the correlation of industries. In particular, it tests the hypothesis that an increase in the use of trade-credi...

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Main Author: Raddatz, Claudio
Format: Policy Research Working Paper
Language:English
Published: World Bank, Washington, DC 2012
Subjects:
CD
GDP
Online Access:http://documents.worldbank.org/curated/en/2008/02/9025045/credit-chains-sectoral-comovemen-t-use-trade-credit-amplify-sectoral-shocks
http://hdl.handle.net/10986/6414
id okr-10986-6414
recordtype oai_dc
spelling okr-10986-64142021-04-23T14:02:31Z Credit Chains and Sectoral Comovement : Does the Use of Trade Credit Amplify Sectoral Shocks? Raddatz, Claudio ACCESS TO FINANCING ACCESS TO FORMAL FINANCE ACCESS TO FUNDS ACCOUNTING ACCOUNTS PAYABLE ACCOUNTS PAYABLES ACCOUNTS RECEIVABLE ACCOUNTS RECEIVABLES ADVERSE EFFECT AFFILIATED ORGANIZATIONS AMOUNT OF CREDIT BALANCE SHEET BALANCE SHEETS BANK CREDIT BANK DEBT BANK FINANCING BANKRUPTCY BANKS BENCHMARK BIASES BORROWING BUDGET CONSTRAINT BUSINESS CYCLE BUSINESS CYCLES CAPITAL FORMATION CD CENTRAL BANK CHECKS COMMODITY CONTRIBUTION CREDIT CRUNCH CREDIT MARKETS CREDIT MECHANISM CREDITORS DEBT DEBTS DEFAULTS DEPENDENT DERIVATIVE DIRECT COST DIVERSIFICATION DOWN PAYMENTS ECONOMIC ANALYSIS ECONOMIES OF SCALE ENDOWMENTS ENTREPRENEUR ENTREPRENEURS EQUALITY EXCLUSION EXPORTS EXTERNAL FINANCING FILING FOR BANKRUPTCY FINANCIAL ANALYSIS FINANCIAL DEVELOPMENT FINANCIAL DIFFICULTIES FINANCIAL DISTRESS FINANCIAL HEALTH FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIARY FINANCIAL SYSTEM FINANCIAL SYSTEMS FORMAL BANK FORMAL CREDIT FUTURE RESEARCH GDP GDP PER CAPITA GINI COEFFICIENT GROWTH RATE INCOME INDIVIDUAL ENTREPRENEURS INFLATION INFLATION RATES INTEREST RATE INTERNATIONAL BANK LATE PAYMENT LIMITED LIABILITY LIQUIDITY LIQUIDITY PROBLEMS LOW INCOME MACROECONOMICS MONETARY POLICY NOMINAL VALUE PRICE INDEX PRIVATE CREDIT PROBABILITY PRODUCTIVITIES PRODUCTIVITY PURCHASES REAL GDP RISK NEUTRAL SALARIES SALES SHORT TERM DEBT SHORT-TERM DEBT SHORT-TERM FINANCING STATEMENT SUB-SAHARAN AFRICA SUPPLY OF CREDIT TOTAL COST TOTAL REVENUE TRADE CREDIT TRADE CREDITORS VALUABLE VALUE ADDED WAGES WEALTH WESTERN EUROPE This paper provides evidence of the presence and relevance of a credit-chain amplification mechanism 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 correlation. The analysis uses detailed data on the correlations and input-output relations of 378 manufacturing industry-pairs across 44 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. 2012-05-25T14:38:11Z 2012-05-25T14:38:11Z 2008-02 http://documents.worldbank.org/curated/en/2008/02/9025045/credit-chains-sectoral-comovemen-t-use-trade-credit-amplify-sectoral-shocks http://hdl.handle.net/10986/6414 English Policy Research Working Paper; No. 4525 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic ACCESS TO FINANCING
ACCESS TO FORMAL FINANCE
ACCESS TO FUNDS
ACCOUNTING
ACCOUNTS PAYABLE
ACCOUNTS PAYABLES
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLES
ADVERSE EFFECT
AFFILIATED ORGANIZATIONS
AMOUNT OF CREDIT
BALANCE SHEET
BALANCE SHEETS
BANK CREDIT
BANK DEBT
BANK FINANCING
BANKRUPTCY
BANKS
BENCHMARK
BIASES
BORROWING
BUDGET CONSTRAINT
BUSINESS CYCLE
BUSINESS CYCLES
CAPITAL FORMATION
CD
CENTRAL BANK
CHECKS
COMMODITY
CONTRIBUTION
CREDIT CRUNCH
CREDIT MARKETS
CREDIT MECHANISM
CREDITORS
DEBT
DEBTS
DEFAULTS
DEPENDENT
DERIVATIVE
DIRECT COST
DIVERSIFICATION
DOWN PAYMENTS
ECONOMIC ANALYSIS
ECONOMIES OF SCALE
ENDOWMENTS
ENTREPRENEUR
ENTREPRENEURS
EQUALITY
EXCLUSION
EXPORTS
EXTERNAL FINANCING
FILING FOR BANKRUPTCY
FINANCIAL ANALYSIS
FINANCIAL DEVELOPMENT
FINANCIAL DIFFICULTIES
FINANCIAL DISTRESS
FINANCIAL HEALTH
FINANCIAL INTERMEDIARIES
FINANCIAL INTERMEDIARY
FINANCIAL SYSTEM
FINANCIAL SYSTEMS
FORMAL BANK
FORMAL CREDIT
FUTURE RESEARCH
GDP
GDP PER CAPITA
GINI COEFFICIENT
GROWTH RATE
INCOME
INDIVIDUAL ENTREPRENEURS
INFLATION
INFLATION RATES
INTEREST RATE
INTERNATIONAL BANK
LATE PAYMENT
LIMITED LIABILITY
LIQUIDITY
LIQUIDITY PROBLEMS
LOW INCOME
MACROECONOMICS
MONETARY POLICY
NOMINAL VALUE
PRICE INDEX
PRIVATE CREDIT
PROBABILITY
PRODUCTIVITIES
PRODUCTIVITY
PURCHASES
REAL GDP
RISK NEUTRAL
SALARIES
SALES
SHORT TERM DEBT
SHORT-TERM DEBT
SHORT-TERM FINANCING
STATEMENT
SUB-SAHARAN AFRICA
SUPPLY OF CREDIT
TOTAL COST
TOTAL REVENUE
TRADE CREDIT
TRADE CREDITORS
VALUABLE
VALUE ADDED
WAGES
WEALTH
WESTERN EUROPE
spellingShingle ACCESS TO FINANCING
ACCESS TO FORMAL FINANCE
ACCESS TO FUNDS
ACCOUNTING
ACCOUNTS PAYABLE
ACCOUNTS PAYABLES
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLES
ADVERSE EFFECT
AFFILIATED ORGANIZATIONS
AMOUNT OF CREDIT
BALANCE SHEET
BALANCE SHEETS
BANK CREDIT
BANK DEBT
BANK FINANCING
BANKRUPTCY
BANKS
BENCHMARK
BIASES
BORROWING
BUDGET CONSTRAINT
BUSINESS CYCLE
BUSINESS CYCLES
CAPITAL FORMATION
CD
CENTRAL BANK
CHECKS
COMMODITY
CONTRIBUTION
CREDIT CRUNCH
CREDIT MARKETS
CREDIT MECHANISM
CREDITORS
DEBT
DEBTS
DEFAULTS
DEPENDENT
DERIVATIVE
DIRECT COST
DIVERSIFICATION
DOWN PAYMENTS
ECONOMIC ANALYSIS
ECONOMIES OF SCALE
ENDOWMENTS
ENTREPRENEUR
ENTREPRENEURS
EQUALITY
EXCLUSION
EXPORTS
EXTERNAL FINANCING
FILING FOR BANKRUPTCY
FINANCIAL ANALYSIS
FINANCIAL DEVELOPMENT
FINANCIAL DIFFICULTIES
FINANCIAL DISTRESS
FINANCIAL HEALTH
FINANCIAL INTERMEDIARIES
FINANCIAL INTERMEDIARY
FINANCIAL SYSTEM
FINANCIAL SYSTEMS
FORMAL BANK
FORMAL CREDIT
FUTURE RESEARCH
GDP
GDP PER CAPITA
GINI COEFFICIENT
GROWTH RATE
INCOME
INDIVIDUAL ENTREPRENEURS
INFLATION
INFLATION RATES
INTEREST RATE
INTERNATIONAL BANK
LATE PAYMENT
LIMITED LIABILITY
LIQUIDITY
LIQUIDITY PROBLEMS
LOW INCOME
MACROECONOMICS
MONETARY POLICY
NOMINAL VALUE
PRICE INDEX
PRIVATE CREDIT
PROBABILITY
PRODUCTIVITIES
PRODUCTIVITY
PURCHASES
REAL GDP
RISK NEUTRAL
SALARIES
SALES
SHORT TERM DEBT
SHORT-TERM DEBT
SHORT-TERM FINANCING
STATEMENT
SUB-SAHARAN AFRICA
SUPPLY OF CREDIT
TOTAL COST
TOTAL REVENUE
TRADE CREDIT
TRADE CREDITORS
VALUABLE
VALUE ADDED
WAGES
WEALTH
WESTERN EUROPE
Raddatz, Claudio
Credit Chains and Sectoral Comovement : Does the Use of Trade Credit Amplify Sectoral Shocks?
relation Policy Research Working Paper; No. 4525
description This paper provides evidence of the presence and relevance of a credit-chain amplification mechanism 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 correlation. The analysis uses detailed data on the correlations and input-output relations of 378 manufacturing industry-pairs across 44 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 Publications & Research :: Policy Research Working Paper
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?
publisher World Bank, Washington, DC
publishDate 2012
url http://documents.worldbank.org/curated/en/2008/02/9025045/credit-chains-sectoral-comovemen-t-use-trade-credit-amplify-sectoral-shocks
http://hdl.handle.net/10986/6414
_version_ 1764400332244254720