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Trade Credit and Imperfect Enforcement

  • Noriyuki Yanagawa
Chapter
  • 48 Downloads
Part of the IDE-JETRO book series (IDE)

Abstract

Trade credit is an important financial mechanism and has recently received a considerable degree of attention in the academic literature (see, for example, McMillan and Woodruff, 1999). It is difficult to supply trade credit, however, if payment cannot be enforced effectively. Thus, the importance of informal enforcement mechanisms or relational contracting has been stressed (McMillan and Woodruff, 1999). It is crucially important to determine whether or not informal enforcement mechanisms are working well in sustaining trade credit in each developing and transition economy.

Keywords

Trade Volume Informal Sector Trade Credit Enforcement Mechanism Relational Contracting 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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References

  1. Allen, Franklin, Jun Quan, and Meijun Quan (2003) “Law, Finance, and Economic Growth in China,” ILE, University of Pennsylvania Law School, Research Paper 3–21.Google Scholar
  2. McMillan, John and Christopher Woodruff (1999) “Interfirm Relationships and Informal credit in Vietnam,” Quarterly Journal of Economics 114(4), 1285–1320.CrossRefGoogle Scholar
  3. Roland, Gerald and Thierry Verdier (2003) “Law Enforcement and Transition,” European Economic Review 47, 669–85.CrossRefGoogle Scholar
  4. Zhou, Xiaochuan (2004) “Improving Legal System and Financial Ecology,” Speech at the “Forum of 50 Chinese Economists,” December 2, Beijing, China.Google Scholar

Copyright information

© Institute of Developing Economies (IDE), JETRO 2006

Authors and Affiliations

  • Noriyuki Yanagawa

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