Ex ante bargaining and ex post enforcement in trade credit supply: theory and evidence from China

If payment of goods is easily default, economic transaction may deeply suffer from the risk. This risky environment formed a mechanism that governs how economic transaction is realized, subsequently how trade credit is given. This paper distinguished ex ante bargaining and ex post enforcement, then modeled that bargaining power reduces trade credit ex ante, and ex post enforcement power and cash in hand of buyer can enhances both trade amount and trade credit in a presence of default risk. We modeled this relationship in order to organize findings from previous literature and from our original micro data on detailed transaction in China to consistently understand the mechanism governing trade credit. Then empirically tested a structure from the theoretical prediction with data. Results show that ex post enforcement power of seller mainly determines size of trade credit and trade amount, cash in hand of buyer can substitute with enforcement power; Bargaining power of seller is exercised to reduces trade credit and trade amount for avoiding default risk, but it simultaneously improves enforcement power as well. We found that ex post enforcement power consists of (ex ante) bargaining power on between two parties and intervention from the third party. However, its magnitude is far smaller than the direct impact to reduce trade credit and trade amount.

Research review : searching for a new framework for Thailand's foreign policy in the post-cold war era

Thai foreign policy in the 1990s has been said to be contingent on the government in power, which changes between (or within) these groups and vacillates between pro-democratic reformists/principle-pursuers and the conservatives/profit-seekers. In these studies, Thailand’s Indochinese policy has often been referred to as a typical consequence of politics between the pragmatists and the reformists. However, whether or not domestic oppositional politics is the key determinant of foreign policy in the post-Cold War era still requires further examination, precisely because the model is now facing serious challenges between theory and reality. In this paper, I review the existing arguments concerning Thailand’s foreign policy in the post-Cold War Era and point out their limitations and questions for future study.