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  • October 2020
  • Article
  • Journal of Corporate Finance

Peer Influence on Trade Credit

By: Daniel Gyimah, Michael Machokoto and Anywhere (Siko) Sikochi
  • Format:Print
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Abstract

We examine the influence of peer firms on trade credit policies of listed firms in the United States. We posit and find evidence that firms mimic their peers in formulating trade credit policies. The findings are more pronounced for firms in highly competitive product markets. Our results also show that firms not only mimic peers in similar circumstances, but they also mimic their more and/or less successful peer firms. These within-group and bidirectional effects highlight the importance of trade credit as a competitive tool in the product markets. Our results are robust to different methods of selecting peers, sampling, different proxies, and estimation techniques.

Keywords

Trade Credit; Peer Effects; Product Market Competition; Trade; Credit; Policy; Competition

Citation

Gyimah, Daniel, Michael Machokoto, and Anywhere (Siko) Sikochi. "Peer Influence on Trade Credit." Journal of Corporate Finance 64 (October 2020).
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About The Author

Anywhere Sikochi

Accounting and Management
→More Publications

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    • February 2023
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    Harambe: Mobilizing Capital in Africa

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    • January 2023 (Revised February 2023)
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    Performance Management at Afreximbank (A) and (B)

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More from the Authors
  • Harambe: Mobilizing Capital in Africa By: Anywhere Sikochi
  • Performance Management at Afreximbank (B) By: Robert S. Kaplan, Siko Sikochi, Anna Ngarachu and Namrata Arora
  • Performance Management at Afreximbank (A) and (B) By: Robert S. Kaplan and Siko Sikochi
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