Trade Credit Terms: Asymmetric Information and Price Discrimination Evidence from Three Continents

• Main Authors: Pike, Richard, CHENG, Nam Sang, Cravens, Karen, Lamminmaki, Dawne
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2005
• Subjects: Accounting; Corporate Finance
• Online Access: https://ink.library.smu.edu.sg/soa_research/689; http://dx.doi.org/10.1111/j.0306-686X.2005.00627.x
• Institution: Singapore Management University

Trade credit terms offer firms contractual solutions to informational asymmetries between buyers and sellers. The credit period permits buyers to reduce uncertainty concerning product quality prior to payment, while the seller can reduce uncertainty concerning buyer payment intentions by prescribing...