Firm-level trade credit responses to COVID-19-induced monetary and fiscal policies: International evidence

Ahmed Al-Hadi*, Almukhtar Al-Abri

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


This paper provides preliminary evidence of the effects of fiscal and monetary policies designed to mitigate and contain the adverse economic impacts of COVID-19 on supplier-customer relationships during the first two quarters of 2020. We compare the impacts of various intervention policies on corporate trade credit for a sample of 14,623 firm-quarter observations, representing 56 countries, after controlling for quarter-, country-, industry-, and firm-fixed effects. We find that, overall, the monetary interventions are associated with lower levels of trade credit, while fiscal interventions increase the use of trade credit. Our results suggest that trade credit is lower in periods of less-restrictive bank credit. This finding has important policy implications for governments as they attempt to help financially constrained businesses survive the pandemic.

Original languageEnglish
Article number101568
JournalResearch in International Business and Finance
Publication statusPublished - Apr 2022
Externally publishedYes


  • COVID-19
  • Economic crises
  • Fiscal policy
  • Monetary policy
  • Non-conventional monetary policy
  • Trade credit

ASJC Scopus subject areas

  • Business, Management and Accounting (miscellaneous)
  • Finance

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