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Paul Beaumont (Paris Dauphine-CREST) – "Customer capital and trade credit: Evidence from exports", joint work with Clémence Lenoir (CREST-ENSAE)
Time: 12:15 pm – 1:15 pm
Date: 28th of November 2017
Place: Room 3001.
Paul Beaumont (Paris Dauphine-CREST) – “Customer capital and trade credit: Evidence from exports”, joint work with Clémence Lenoir (CREST-ENSAE)
A recent strand of papers (e.g., Foster et al. 2008 ; Gourio and Rudanko, 2014) claim that the mechanisms underlying the formation of a customer base are key in understanding the evolution of aggregate productivity or Tobin’s Q. In this paper, we investigate whether liquidity constraints affect firms’ customer acquisition. Exploiting an exogenous variation in payment delays triggered by a 2009 French reform, we rely on transaction-level export datasets to test whether changes in working capital financing affects the propensity to acquire new clients. The effect of the reform on payment delays is isolated using a threshold rule introduced by the law. The estimations strongly support the hypothesis that liquidity constraints play an important role in the expansion of the customer base in international markets: an exogenous decrease in payment delays by ten days is found to raise the number of clients (volume of exports) by 3.7% (3.8%) in the countries already served by the firm and to increase the probability of exit by 2.2 percentage points.
Laurent Davezies (CREST – ENSAE), Arne Uhlendorff (CREST – ENSAE) & Yannick Guyonvarch (CREST – ENSAE)
food provided, no registration