To mitigate this problem, we use the exogenous improvement in bank loan availability for small businesses that occurred with the establishment of Japan’s ECG program in 2008. As we have argued, with the establishment of the ECG program, banks were less likely to deny credit applications from small businesses that met the requirements of the program. If bank loans are superior to trade credit received in terms of the cost of financing, and if trade credit received and bank loans are substitutes, small businesses would have switched from trade credit to bank loans during the period of the financial shock.