Chapter 11

Exploring the Relationship Between Supplier Credit and SMEs Technical Efficiency

Mariarosaria Agostino and Francesco Trivieri

Abstract

In this chapter, we investigate whether the choice of a particular source of funds represented by trade credit is associated to technical efficiency progress for a large sample of Italian manufacturing small and medium enterprises (SMEs) observed from 2003 to 2007. Applying a data envelopment analysis (DEA) approach to firm-level data, we retrieve a measure of technical efficiency change and perform some nonparametric tests to verify whether the differences observed are significant. According to our results, higher trade credit ratios tend to be associated to firm efficiency gains in almost all the sectors under analysis.

Total Pages: 262-281 (20)

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