1 Corporate Inventory Financing: Trade Credit, Bank Loans Xiaolou Yang Lloyd P. Blenman This version October 2008 Keywords: Trade Credit, Financial Frictions, Inventory, Generalized Method of Moment Xiaolou Yang is Assistant Professor of Finance, Youngstown State University, Williamson College of Business, Department of Accounting and Finance, Youngstown, Ohio 44555. Email: xyang@ysu.edu. Lloyd Blenman is Professor of Finance, Belk College of Business, Department of Finance, University of North Carolina- Charlotte, NC 28223. Email:lblenman@uncc.edu. The authors thank Russell Cooper, Dean Corbea and Yingyao Hu for their helpful comments and suggestions. Any remaining errors are our own.