How Do Risk Preferences Impact the Choice of Trade Credit?

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Oguzhan Batmaz, Veysel Avsar


Investigating the impact of patience and risk-taking on trade credit using detailed payments data in imports from Turkey and comprehensive cross-country data on economic preferences from the Global Preference Survey (GPS), our research findings indicate a correlation between a country's risk-taking preferences and the proportion of imports conducted using the open account method. This suggests that countries with a greater propensity for risk-taking tend to engage in more open account transactions for imports. Notably, this paper appears to be the first to explore the behavioral dimension of trade finance in this manner.

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Oguzhan Batmaz, Veysel Avsar. (2024). How Do Risk Preferences Impact the Choice of Trade Credit?. European Economic Letters (EEL), 14(1), 157–160.