Short-term financing sources in Africa: Substitutes or complements?
Using panel vector autocorrelation models (Panel VaR), we examine the dynamic interrelationships between short-term financing sources for a large sample of 8,464 firm-year observations from seven understudied developing economies over the period 1991-2015. On average, we find that short-term debt an...
| Main Authors: | , , |
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| Format: | Journal Article |
| Language: | English |
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Elsevier
2021
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| Subjects: | |
| Online Access: | http://hdl.handle.net/20.500.11937/92264 |
| _version_ | 1848765629662756864 |
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| author | Machokoto, Michael Mahonye, Nyasha Makate, Marshall |
| author_facet | Machokoto, Michael Mahonye, Nyasha Makate, Marshall |
| author_sort | Machokoto, Michael |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | Using panel vector autocorrelation models (Panel VaR), we examine the dynamic interrelationships between short-term financing sources for a large sample of 8,464 firm-year observations from seven understudied developing economies over the period 1991-2015. On average, we find that short-term debt and trade credit are complements, while cash holdings are substitutes for short-term debt and trade credit. However, our further analyses show that the interrelationships between short-term financing sources are strong and significant before the financial crisis but diminish thereafter with contractions in credit supply. These changes highlight the impact of credit supply shocks on short-term financing policies of firms domiciled in less-developed capital markets. As firms in Africa, an exemplary less-developed capital market context, rely heavily on short-term financing sources, the dynamic interrelationships we document have important implications that are of interest to academics, practitioners, and policymakers alike. |
| first_indexed | 2025-11-14T11:38:17Z |
| format | Journal Article |
| id | curtin-20.500.11937-92264 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T11:38:17Z |
| publishDate | 2021 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-922642023-06-15T07:25:10Z Short-term financing sources in Africa: Substitutes or complements? Machokoto, Michael Mahonye, Nyasha Makate, Marshall Social Sciences Business, Finance Business & Economics Short-term finance Africa Cash holdings Trade credit Short-term debt Financial crisis Emerging markets CORPORATE CASH HOLDINGS TRADE CREDIT CAPITAL STRUCTURE FLOW SENSITIVITY MONETARY-POLICY ZERO-LEVERAGE BANK CREDIT PANEL-DATA FIRMS DEBT Using panel vector autocorrelation models (Panel VaR), we examine the dynamic interrelationships between short-term financing sources for a large sample of 8,464 firm-year observations from seven understudied developing economies over the period 1991-2015. On average, we find that short-term debt and trade credit are complements, while cash holdings are substitutes for short-term debt and trade credit. However, our further analyses show that the interrelationships between short-term financing sources are strong and significant before the financial crisis but diminish thereafter with contractions in credit supply. These changes highlight the impact of credit supply shocks on short-term financing policies of firms domiciled in less-developed capital markets. As firms in Africa, an exemplary less-developed capital market context, rely heavily on short-term financing sources, the dynamic interrelationships we document have important implications that are of interest to academics, practitioners, and policymakers alike. 2021 Journal Article http://hdl.handle.net/20.500.11937/92264 10.1016/j.ribaf.2021.101572 English Elsevier restricted |
| spellingShingle | Social Sciences Business, Finance Business & Economics Short-term finance Africa Cash holdings Trade credit Short-term debt Financial crisis Emerging markets CORPORATE CASH HOLDINGS TRADE CREDIT CAPITAL STRUCTURE FLOW SENSITIVITY MONETARY-POLICY ZERO-LEVERAGE BANK CREDIT PANEL-DATA FIRMS DEBT Machokoto, Michael Mahonye, Nyasha Makate, Marshall Short-term financing sources in Africa: Substitutes or complements? |
| title | Short-term financing sources in Africa: Substitutes or complements? |
| title_full | Short-term financing sources in Africa: Substitutes or complements? |
| title_fullStr | Short-term financing sources in Africa: Substitutes or complements? |
| title_full_unstemmed | Short-term financing sources in Africa: Substitutes or complements? |
| title_short | Short-term financing sources in Africa: Substitutes or complements? |
| title_sort | short-term financing sources in africa: substitutes or complements? |
| topic | Social Sciences Business, Finance Business & Economics Short-term finance Africa Cash holdings Trade credit Short-term debt Financial crisis Emerging markets CORPORATE CASH HOLDINGS TRADE CREDIT CAPITAL STRUCTURE FLOW SENSITIVITY MONETARY-POLICY ZERO-LEVERAGE BANK CREDIT PANEL-DATA FIRMS DEBT |
| url | http://hdl.handle.net/20.500.11937/92264 |