Trade credit linkages along the supply chain: evidence for the Italian textile sector

We examine the trade credit linkages among firms within a supply chain to reckon the effect of such linkages on the propagation of liquidity shocks from downstream to upstream firms. We choose a sample appropriate for this task, consisting of a large data set of Italian firms from the textile industry, a well known example of a comprehensive manufacturing cluster featuring a large number of small and specialized firms at each level of the supply chain. The results of the analysis indicate that the level of trade credit that firms provide to their suppliers is positively related to the level of trade credit granted to their clients: when the level of trade credit granted to clients divided by sales goes up by 1, the level of trade credit provided to suppliers divided by cost-of goods-sold goes up by an amount that varies between 0,22 and 0,52. Since all firms along the chain are linked by trade credit relationships, an increase in the level of trade credit granted by wholesalers generates a liquidity cascade throughout the chain. We designate the overall increase in the level of trade credit among all firms in the chain as a result of a unitary impulse in the level of trade credit granted by wholesalers as the multiplier effect of trade credit for the industry chain. We estimate such multiplier to vary between 1.28 and 2.04. We also investigate the effect of final demand on the level of trade credit sourced by firms at various levels of the chain and, in particular, whether such effect is amplified for firms further up in the chain as a result of liquidity propagation via trade credit linkages. We uncover evidence of such amplification when the links of liquidity transmission along the chain are individually modeled and estimated. An unitary increase in wholesalers’ sales is found to produce an effect on trade payables among firms at the top of the chain (i.e., Preparers and Spinners) that is more than twice as big as the corresponding effect among firms at the bottom of the chain (i.e., Wholesalers).

Current status and perspectives of accelerated carbonation processes on municipal waste combustion residues

The increasing volumes of municipal solid waste produced worldwide are encouraging the development of processes to reduce the environmental impact of this waste stream. Combustion technology can facilitate volume reduction of up to 90%, with the inorganic contaminants being captured in furnace bottom ash, and fly ash/APC residues. The disposal or reuse of these residues is however governed by the potential release of constituent contaminants into the environment. Accelerated carbonation has been shown to have a potential for improving the chemical stability and leaching behaviour of both bottom ash and fly ash/APC residues. However, the efficacy of carbonation depends on whether the method of gas application is direct or indirect. Also important are the mineralogy, chemistry and physical properties of the fresh ash, the carbonation reaction conditions such as temperature, contact time, CO2 partial pressure and relative humidity. This paper reviews the main issues pertaining to the application of accelerated carbonation to municipal waste combustion residues to elucidate the potential benefits on the stabilization of such residues and for reducing CO2 emissions. In particular, the modification of ash properties that occur upon carbonation and the CO2 sequestration potential possible under different conditions are discussed. Although accelerated carbonation is a developing technology, it could be introduced in new incinerator facilities as a "finishing step" for both ash treatment and reduction of CO2 emissions.