Securitization, Trade Credit and The Nature of Goods

Abstract

We examine whether non-financial firms use securitization as a tool to increase trade credit. Our results suggest that securitization use is associated with increased investment in trade receivables. The impact of securitization on sales growth and market share depends on the nature of the goods sold, with significant positive increases only for firms selling services or differentiated goods. Securitization is not associated with increases in short-term income.