TRADE VERSUS BANK CREDIT
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Date
2021-06
Authors
Token, Aizat
Journal Title
Journal ISSN
Volume Title
Publisher
Nazarbayev University School of Sciences and Humanities
Abstract
This study analyzes the relationship between trade and bank credit, considering
them as jointly determined variables. The relative sizes of bank and trade credit to
sales are modeled in a two-equation system, allowing them to appear as explanatory
variables in each other’s equations. Utilizing the administrative panel data consisting
of large firms in Kazakhstan, I carry out my estimations employing the 2SLS method
treating exclusion restrictions as instruments. Short-term financial investments are
used as the exclusion restriction for the trade credit equation, whereas the size of
intangible assets and cash-on-hand are utilized as exclusion restrictions for the bank
loans equation. The results suggest a complementary relationship between trade and
bank credit. Additional analysis during the 2014-15 economic crisis period points out
to a decrease in the effect of the size of the labor cost on trade credit on the onset till
the middle of the 2014-15 economic crisis. I also find that the effect of the size of fixed
assets on bank loans weakened in 2015-16.
Description
Keywords
trade, bank credit, Kazakhstan, Type of access: Open Access
Citation
Token, A. (2021). Trade versus bank credit (Unpublished master`s thesis). Nazarbayev University, Nur-Sultan, Kazakhstan