"The Role of Trade Credit for Small Firms: An Implication from Japan's Banking Crisis"

Trade credit is one of the most important sources of short-term external finance for small firms. Previous literature has focused mainly on the substitution of bank loans for trade credit during monetary tightening among many firms, but in this paper we investigate the role of trade credit during the banking crisis in Japan. The basic motivation is to explore whether the substitution hypothesis still holds even under serious financial turbulence. Our main results suggest that the substitution hypothesis held in Japan when the banking sector was healthy, but broke down during the banking crisis. More precisely, both bank loans and trade credit contracted simultaneously during the crisis. Deteriorated bank health might have been primarily responsible for the widespread declines of credit to small and medium size firms in Japan during the banking crisis.

The Role of Trade Credit for Small Firms : An Implication from Japan’s Banking Crisis

The purpose of this paper is to investigate the role of trade credit during the banking crisis in Japan. Trade credit is one of the most important sources of short-term external finance for small firms. Previous literature has focused mainly on the substitution of bank loans for trade credit during monetary tightening among many firms, but in this paper we investigate the role of trade credit during the banking crisis. The basic motivation is to explore whether the substitution hypothesis still holds even under serious financial turbulence. Our main results suggest that the substitution hypothesis held in Japan when the banking sector was healthy, but broke down during the banking crisis. More precisely, both bank loans and trade credit contracted simultaneously during the crisis. Deteriorated bank health might have been primarily responsible for the widespread declines of credit to small and medium size firms in Japan during the banking crisis.Trade credit, Bank-firm relationship, Unlisted firms

The Role of Trade Credit for Small Firms: An Implication from Japan's Banking Crisis

Trade credit is one of the most important sources of short-term external finance for small firms. Previous literature has focused mainly on the substitution of bank loans for trade credit during monetary tightening among many firms, but in this paper we investigate the role of trade credit during the banking crisis in Japan. The basic motivation is to explore whether the substitution hypothesis still holds even under serious financial turbulence. Our main results suggest that the substitution hypothesis held in Japan when the banking sector was healthy, but broke down during the banking crisis. More precisely, both bank loans and trade credit contracted simultaneously during the crisis. Deteriorated bank health might have been primarily responsible for the widespread declines of credit to small and medium size firms in Japan during the banking crisis.

Impaired Bank Health and Default Risk ( Forthcoming in "Pacific-Basin Finance Journal". )

Empirical studies in corporate finance have long been focused on the role of banks in reducing the costs of financial distress. The environment and events in Japan provide a "natural experiment" that allows such empirical studies. The number of bankruptcies steadily increased throughout the 1990s, and peaked in 2000. During this period, Japan?s banking sector, in contrast, faced considerable problems regarding the disposal of their bad loans. The purpose of this paper is to investigate how various measures of bank health and how defaults of major trading partners affected the probability of bankruptcy among medium-size firms in Japan. Using probit models, we examine the causes of bankruptcy for unlisted Japanese companies in the late 1990s and early 2000s. We find that several measures of bank-specific financial health have had significant impacts on a borrower's probability of bankruptcy, even when observable characteristics relating to these borrower's financial variables are controlled. In particular, a close bank-firm relationship - which usually reduces the probability of bankruptcy - exacerbates the impacts of a financial crisis, which substantially damages other bank health measures as well.

The Role of Trade Credit for Small Firms: An Implication from Japan's Banking Crisis

Trade credit is one of the most important sources of short-term external finance for small firms. Previous literature has focused mainly on the substitution of bank loans for trade credit during monetary tightening among many firms, but in this paper we investigate the role of trade credit during the banking crisis in Japan. The basic motivation is to explore whether the substitution hypothesis still holds even under serious financial turbulence. Our main results suggest that the substitution hypothesis held in Japan when the banking sector was healthy, but broke down during the banking crisis. More precisely, both bank loans and trade credit contracted simultaneously during the crisis. Deteriorated bank health might have been primarily responsible for the widespread declines of credit to small and medium size firms in Japan during the banking crisis.Trade credit, Bank-firm relationship, Unlisted firms

Ion Charge State Fluctuations in Vacuum Arcs

Abstract. Ion charge state distributions of cathodic vacuum arcs have been investigated using a modified time-of-flight method. Experiments have been done in double gate and burst gate mode, allowing us to study both systematic and stochastic changes of ion charge state distributions with a time resolution down to 100 ns. In the double gate method, two ion charge spectra are recorded with a well-defined time between measurements. The elements Mg, Bi, and Cu were selected for tests, representing metals of very different properties. For all elements it was found that large stochastic changes occur even at the limit of resolution. This is in agreement with fast changing arc properties observed elsewhere. Correlation of results for short times between measurements was found but it is argued that this is due to velocity mixing rather than due to cathode processes. The burst mode of time-of-flight measurements revealed the systematic time evolution of ion charge states within a single arc discharge, as opposed to previous measurements that relied on data averaged over many pulses. The technique shows the decay of the mean ion charge state as well as the level of material-dependent fluctuations