Credit Crunchers

In this last post the creditcrunchers would like to finalize with their findings of the eventual, submitted paper and tell something about the team's synergie. This last post also means the end of our blogging existence as the true social financial influencers we were. At first we would like to mention that good project management is key, but efficiency in effective writing can also come in handy. Thanks to good communication with the team members we managed to get the job done and therefore we have respected the deadline of submitting our paper. As honesty obliged us we had to admit that we sadly had to re-orientate on the direction we wanted to  go in our research. This is the reason why our blogspot might not seem to bring a consistent set of topics or story. We were a little over ambitious when we wanted to relate the Quantitative Easing policy to the use of trade credit in Belgian organizations. During our initial research we had to conclude that we could not get...

Trade credit: the paradox As already mentioned in our previous blogpost, we have shifted our focus to the difference in trade credit between public and private firms. It’s a fact that public firms have easier access to external financing and have more bargaining power than private firms. These are some of the reasons why this kind of firms don’t need that much trade credit as a private firm. For a private firm, trade credit is an important way of financing. They do not possess the same possibilities as a public firm. Of course the needs of the private firms for trade credit are not always fulfilled by their suppliers. There is always a risk for them by giving more trade credit to a certain client. Giving a private firm more trade credit involves more risk than allocating this credit to a public firm. A way to measure this risk is to look at the cost of capital. This cost is lower for public firms. By summarizing the two previous paragraphs, w...