Affiliation:
1. University of Toronto
2. Analysis Group
3. University of California San Diego
Abstract
ABSTRACTWe exploit
the introduction of the Payment Practices Disclosure Regulation in the United Kingdom (UK) to examine the effects of mandating disclosure of customer‐supplier payment practices. We find that nondisclosing small and medium‐sized enterprises (SMEs) experience a reduction in their accounts receivable by 8.3%, consistent with an acceleration of their trade credit collections. Further, SMEs exhibit fewer financial constraints after the regulation. We survey managers from large firms and SMEs to understand the underlying mechanisms. The required disclosures raise large firms’ reputational concerns and shift the bargaining power between large firms and SMEs. Additionally, the new disclosures compel executives at large firms to scrutinize their own firms’ payment practices, leading to increased accountability and a stronger focus on timely payment among senior managers.
Reference59 articles.
1. Forcing Firms to Talk: Financial Disclosure Regulation and Externalities
2. Corporate Social Responsibility and Firm Risk: Theory and Empirical Evidence
3. Alvarez andMarsal. “Duty to Report on Payment Practices and Performance in UK: What Businesses Need to Know About.” 2017. Available athttps://www.alvarezandmarsal.com/insights/duty‐report‐payment‐practices‐and‐performance‐uk
4. Baker S. E. andEdwards R.“How Many Qualitative Interviews Is Enough.” Working Paper National Centre for Research Methods Review 2012.
5. Trade Credit and Industry Dynamics: Evidence from Trucking Firms
Cited by
1 articles.
订阅此论文施引文献
订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献