Factors influencing the use of trade credit in financing Polish listed companies

Duliniec Aleksandra () and Świda Natalia ()
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Duliniec Aleksandra: Capital Markets Department, Collegium of World Economy, SGH Warsaw School of Economics, al. Niepodległości 162, 02-554Warszawa, Poland
Świda Natalia: Capital Markets Department, Collegium of World Economy, SGH Warsaw School of Economics, al. Niepodległości 162, 02-554Warszawa, Poland

Economics and Business Review, 2021, vol. 7, issue 1, 113-134

Abstract: The aim of this article is to identify the most important factors influencing the use of trade credit and to assess their significance for Polish listed companies taking into consideration the role of trade credit as a source of financing. Theoretical and empirical literature does not provide clear guidance regarding factors influencing the use of trade credit. In this study the linear regression model with fixed effects for years is used to describe trade credit use in listed Polish companies in the period 2002–2018. The findings show that the following factors have the most pronounced influence on the use of trade credit: trade payables in the previous period, trade receivables, long-term debt, liquidity and short-term debt. Both long-term and short-term debt financing and trade payables are substitutes for Polish listed companies. Lower liquidity and higher trade receivables are related to a higher use of trade credit.

Keywords: trade payables; trade credit; sources of financing; Warsaw Stock Exchange (search for similar items in EconPapers)
JEL-codes: G31 G32 L21 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:ecobur:v:7:y:2021:i:1:p:113-134:n:2

DOI: 10.18559/ebr.2021.1.7

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