| Summary: | The fact that more than 80% of business to business transactions are conducted on credit terms in the UK, representing a trade credit flow tWice as large as the size of bank credit means that the economic consequences of trade credit deserve special research· awareness. However, there are severalhnportant aspects of trade credit that have not. received full research attention or simply have not been tested empirically. This. thesis aims to fill the gaps in the trade credit literature. It conducts a thorough investigation of trade credit usage by the UK businesses by focusing on three main themes. The first theme examines trade credit management. It analyzes how the changing role of credit management within business as credit managers take on a more pro-active and strategic role within businesses. I also explore the underlying incentives of trade credit usage in this .theme' using unique data from a survey questionnaire. The second theme analyzes ', the celebrated and arguable Meltzer's redistribution hypothesis, which proposes that there is an 'inter-firm credit channel' that offsets the standard 'credit channel' of monetary policy. The third theme investigates the relationship between trade credit and financial distress. Typically, it sheds light on how suppliers provide financial support (extend trade credit terms) to customers even when the customer exhibits signs of financial distress and how suppliers adjust their credit policy toward their customers when these suppliers themselves are under financial distress.
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