Abstract:

This paper aims to test trade credit channel in Turkey over the period from 2008 to 2016 using two sector level data sets obtained from the aggregated accounts of Central Bank of the Republic of Turkey (CBRT) statistics. First sample consists of 7 main sectors and other sample involves 12 manufacturing-sub sectors. Dynamic panel data methods were applied to test whether monetary and nonmonetary factors of trade credit have an impact on both gross and net trade credit status.  According to analysis results about trade credit received (gross), monetary policy restrictions has increased the trade credit usage of small firm classes. Findings for net trade credit (net) showed that main-sectors SME sized firm groups became net trade credit receiver while large sized firm group was net trade credit extender and in manufacturing sub-sectors, SMEs samples were net trade credit extender. Three main conclusions derived from these findings are; i) Trade credit channel has operated with the strongest effects on small firms. ii) Trade credits tend to flow from SMEs in manufacturing industry to the SMEs in all sectors. iii) Across all sectors, large firms tend to transfers funds to SMEs through trade credit.

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