Taxes and the Theory of Trade Debt

IVAN E. BRICK; WILLIAM K.H. FUNG

doi:10.1111/j.1540-6261.1984.tb03900.x

Taxes and the Theory of Trade Debt

IVAN E. BRICK, WILLIAM K.H. FUNG

RBS - Finance & Economics

Research output: Contribution to journal › Article › peer-review

38 Scopus citations

Abstract

In this paper, we show that taxes motivate the flow of trade credit without involving the assumption of credit market imperfections. The direction of trade credit flow depends on the distribution of marginal tax rates among buyers and sellers. In equilibrium, the trade credit decision follows a tax‐induced clientele on both the supply and demand side. 1984 The American Finance Association

Original language	English (US)
Pages (from-to)	1169-1176
Number of pages	8
Journal	Journal of Finance
Volume	39
Issue number	4
DOIs	https://doi.org/10.1111/j.1540-6261.1984.tb03900.x
State	Published - Sep 1984

All Science Journal Classification (ASJC) codes

Accounting
Finance
Economics and Econometrics

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10.1111/j.1540-6261.1984.tb03900.x

Cite this

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Taxes and the Theory of Trade Debt

Abstract

All Science Journal Classification (ASJC) codes

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