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Net trade credit: what are the determinants?

Afrifa, Godfred Adjapong, Gyapong, Ernest (2017) Net trade credit: what are the determinants? International Journal of Managerial Finance, 13 (3). pp. 246-266. ISSN 1743-9132. (doi:10.1108/IJMF-12-2015-0222) (KAR id:66497)

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Abstract

The purpose of this paper is to extend the literature on trade receivables and trade payables by examining the determinants of net trade credit. Design/methodology/approach: To do that, a sample of 67,047 firms in the UK with 443,190 firm year observations is used. Findings: The 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. Originality/value: 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
DOI/Identification number: 10.1108/IJMF-12-2015-0222
Additional information: TP 21/03/2018 Godfred joined KBS 15/03/2018 have requested AAM and full DOP. TP 26/03/2018 AAM updated Godfred does not know full DOP and therefore file closed.
Uncontrolled keywords: Crisis, Industry competitiveness, Net trade credit, Trade payables, Trade receivables, G30, G31, G32
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Divisions > Kent Business School - Division > Department of Accounting and Finance
Depositing User: Godfred Afrifa
Date Deposited: 21 Mar 2018 12:24 UTC
Last Modified: 08 Dec 2022 20:52 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/66497 (The current URI for this page, for reference purposes)

University of Kent Author Information

Afrifa, Godfred Adjapong.

Creator's ORCID: https://orcid.org/0000-0003-3670-8812
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