This is the first book to report the details of the current status of
interfirm relationships in Japan. Based on a unique data set of firms,
the authors describe the characteristics of interfirm transactions in a
manner unprecedented in the literature. Special emphasis is placed on
the nature of payment/collection between firms. Payment for interfirm
transactions is usually made on account, or by payment after delivery,
rather than by immediate payment. Thus, most interfirm transactions are
accompanied by a provision of credit (i.e., lending/borrowing) from a
seller to a buyer, referred to as trade credit. Although trade credit is
used all around the world and accounts for a large portion of firms'
balance sheets, researchers, lacking detailed data, have long
encountered serious difficulty in clarifying how and why firms use trade
credit.
In this work the authors use a huge, unique data set of about 380,000
firms in Japan during the 2007-2010 period. To grasp the entirety of
this enormous data set, which is tantamount to a picture of all firms
currently operating in Japan, this brief summarizes descriptive
statistics and conducts univariate analyses of the data. Also provided
is the legal background of trade credit practice in Japan from the "law
and economics" perspective. In this manner, the book furnishes vital
information that can be used as a reference for future theoretical and
empirical analyses of trade credit and interfirm relationships.
