 An Empirical Investigation of Trade Credit DemandBarbara Summers and Nicholas Wilson International Journal of the Economics of Business, 2002, vol. 9, issue 2, 257-270 Abstract: This paper investigates the motivations for a firm's demand for trade credit. Demand for credit is modelled as a function of transaction costs motivations, financing motivations, operational considerations, seller compliance issues and supplier marketing, whilst controlling for the firm's business environment and for firm characteristics such as size and industry. This paper builds on previous studies by considering a wider range of factors that can affect trade credit demand holistically on a single sample. It appears that the use of trade credit is widespread, and that it is generally perceived as an important short term financing option, although the availability of trade credit is not a major influence on supplier choice. The level of a firm's trade credit demand is found to be significantly influenced by transaction costs, financing, operational issues, marketing activities by suppliers, the firm's investment in trade debtors and firm size. Keywords: Trade Credit; Demand For Credit; Short Term Finance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:ijecbs:v:9:y:2002:i:2:p:257-270 Ordering information: This journal article can be ordered from DOI: 10.1080/13571510210135005 Access Statistics for this article International Journal of the Economics of Business is currently edited by Eleanor Morgan More articles in International Journal of the Economics of Business from Taylor & Francis Journals |
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