Abstract
We investigate the relationship between board connections and firms’ access to trade credit. Using a comprehensive sample of United States firms from 2000 to 2017, we find that those with more linkages with outside boards are associated with greater access to trade credit (e.g., a higher proportion of accounts payable to cost of goods sold). The finding persists in a battery of tests that mitigate endogeneity concerns and enhance robustness. Furthermore, this positive relationship is especially salient for firms with strong liquidity needs in ongoing operations, firms with opaque information environments, and firms with high profitability. This study sheds light on how boardroom networks facilitate firms’ routine transactions and informal financing.
| Original language | English |
|---|---|
| Pages (from-to) | 143-160 |
| Number of pages | 18 |
| Journal | Accounting Horizons |
| Volume | 40 |
| Issue number | 3 |
| DOIs | |
| State | Published - Sep 2026 |
| Externally published | Yes |
Keywords
- board connections
- social networks
- trade credit
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