Intangible liabilities and trade credit: Evidence from 10-K disclosures

This paper examines whether exposure to intangible liabilities is associated with firms’ reliance on supplier-provided trade credit. Using a text-based measure from Form 10-K filings, we find that firms with greater intangible liabilities rely more heavily on trade credit. This relation is robust to matching estimators, instrumental variable approaches, and placebo tests. The effect is stronger among financially constrained firms, firms without credit ratings, firms with volatile operating cash flows, and firms with less readable disclosures, consistent with a financing-frictions interpretation. Overall, our findings suggest that intangible liabilities are an informative determinant of trade credit and highlight the role of qualitative risk disclosure in shaping corporate financing decisions.