Trade credit supply and financial distress outcomes: evidence from Australian voluntary administrations

IF 16.4 1区 化学 Q1 CHEMISTRY, MULTIDISCIPLINARY Accounts of Chemical Research Pub Date : 2023-08-03 DOI:10.1108/jal-01-2023-0007
J. Routledge
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Abstract

PurposeThe objective of this study is to investigate the relationship between trade credit supply and financial distress outcomes, considering the role that trade credit plays as a substantial source of liquidity for distressed companies. Specifically, it examines whether there is an association between trade credit supply and the outcomes experienced by companies that undergo the voluntary administration (VA) insolvency procedure under Australian corporate law.Design/methodology/approachThe study examines a sample of companies that were listed on the Australian Securities Exchange and entered VA between 2002 and 2019. Ordered logistic regression is used to determine the relation between trade credit and VA outcomes. The VA outcomes considered are as follows: (1) company liquidation, (2) orderly dissolution through an agreement with creditors, or (3) an agreement with creditors for reorganization of all or part of the company's business.FindingsThe findings show that trade creditors' willingness to supply credit is influenced by their rational expectations about the future prospects of financially distressed customers. Higher levels of trade credit and an increase in trade credit supply prior to VA are associated with a greater probability of achieving a reorganization versus a liquidation or dissolution outcome.Originality/valueThere is no apparent prior study investigating the connection between trade credit supply and outcomes for distressed companies entering insolvency administration. Therefore, this study provides novel evidence on the role of trade credit in the context of financial distress. Understanding the relationship between trade credit supply and outcomes is particularly significant considering that many jurisdictions offer distressed companies the opportunity to pursue reorganization under their insolvency laws. Examining financial distress and trade credit in the Australian creditor-friendly context expands on existing research. Prior research has predominantly relied on data from the United States, which has debtor-friendly bankruptcy law. Consequently, these studies may lack generalizability to jurisdictions with creditor-friendly law such as Australia.
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贸易信贷供应和金融危机结果:来自澳大利亚自愿管理的证据
本研究的目的是研究贸易信贷供应与财务困境结果之间的关系,考虑到贸易信贷作为陷入困境的公司的重要流动性来源所起的作用。具体而言,本文考察了贸易信贷供应与根据澳大利亚公司法进行自愿管理(VA)破产程序的公司所经历的结果之间是否存在关联。该研究调查了2002年至2019年期间在澳大利亚证券交易所上市并进入VA的公司样本。使用有序逻辑回归来确定贸易信用与VA结果之间的关系。考虑的重组结果如下:(1)公司清算,(2)通过与债权人达成协议有序解散,或(3)与债权人达成协议重组全部或部分公司业务。研究结果表明,商业债权人提供信贷的意愿受到他们对财务困境客户未来前景的理性预期的影响。相对于清算或解散的结果,较高的贸易信贷水平和在VA之前增加的贸易信贷供应与实现重组的更大可能性有关。没有明显的先前研究调查贸易信贷供应与陷入困境的公司进入破产管理的结果之间的联系。因此,本研究为贸易信贷在财务困境背景下的作用提供了新的证据。考虑到许多司法管辖区根据其破产法为陷入困境的公司提供寻求重组的机会,了解贸易信贷供应与结果之间的关系尤为重要。在澳大利亚债权人友好的背景下检查财务困境和贸易信贷扩展了现有的研究。先前的研究主要依赖于美国的数据,美国有有利于债务人的破产法。因此,这些研究可能缺乏通用性,无法适用于诸如澳大利亚等法律对债权人友好的司法管辖区。
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来源期刊
Accounts of Chemical Research
Accounts of Chemical Research 化学-化学综合
CiteScore
31.40
自引率
1.10%
发文量
312
审稿时长
2 months
期刊介绍: Accounts of Chemical Research presents short, concise and critical articles offering easy-to-read overviews of basic research and applications in all areas of chemistry and biochemistry. These short reviews focus on research from the author’s own laboratory and are designed to teach the reader about a research project. In addition, Accounts of Chemical Research publishes commentaries that give an informed opinion on a current research problem. Special Issues online are devoted to a single topic of unusual activity and significance. Accounts of Chemical Research replaces the traditional article abstract with an article "Conspectus." These entries synopsize the research affording the reader a closer look at the content and significance of an article. Through this provision of a more detailed description of the article contents, the Conspectus enhances the article's discoverability by search engines and the exposure for the research.
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