Net trade credit: what are the determinants?

Afrifa, G. and Gyapong, E. (2017) Net trade credit: what are the determinants? International Journal of Managerial Finance. ISSN 1743-9132.

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The main objective of this paper is to extend the literature on trade receivables and trade payables by examining the determinants of net trade credit. To do that, a sample of 67,047 firms in the UK with 443,190 firm year observations is used. Results are robust to unobserved heterogeneity and industry effects. The evidence suggests that firms with more inventories, market share and are financially distressed invest less in trade credit. Moreover, higher operating cash flow, annual sales growth, export propensity, access to bank credit and larger firms lead to higher investment in trade credit. Additionally, the paper broadens the scope of the literature by analysing the determinants of net trade credit around the financial crisis and industry competitiveness.

Item Type: Article
Subjects: H Social Sciences > HF Commerce > HF5001 Business
H Social Sciences > HF Commerce > HF5601 Accounting
H Social Sciences > HG Finance
Divisions: Faculty of Social and Applied Sciences > The Business School
Depositing User: Dr Godfred Afrifa
Date Deposited: 11 Jan 2017 14:27
Last Modified: 20 Nov 2018 18:45

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Last edited: 29/06/2016 12:23:00