Factoring in Brazil: An information asymmetry approach.

摘要

The purpose of the study is to analyze the role of information asymmetries in the choice between the use of pre-dated checks and credit cards in Brazil as well as to investigate the existence of reinforcing mechanisms that might explain the prevalence of pre-dated checks or credit cards in different economies or even in different sectors of the economy.; In order to do so, an information asymmetry model is developed, based on the factoring model developed by Sopranzetti (1998), which, in turn, is based on the work of Gorton and Pennacchi (1993).; The main conclusions are the following: (1) There is quantitative evidence in the data supporting the idea that sellers take their information regarding the clients creditworthiness into account in order to establish a preference for a specific medium of payment. (2) There is some qualitative evidence suggesting the existence of recursive mechanisms determining the prevalence of pre-dated checks or credit cards in specific sectors in the economy.; Finally, by using the assertion that factors take both the relative efficiency in factoring and the spread between the seller and the factor's discount rates, we can offer an alternative explanation for the apparent paradox between the need to reduce risk exposure and the choice of no-recourse factoring for the less risky accounts receivable by American firms.