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Trade Crediting – Barriers to Its Use for Financing the Innovations

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  • Galia Taseva

Abstract

Trade credit is one of the traditional sources of firm financing, which keeps its significance in the modern conditions of development of the financial markets and innovations. It is a means of increasing the flexibility and adaptivity of the firms. Its significance as a financial and operative instrument for carrying out the enterprise activity additionally increases in crisis and lowering the access to institutional financing. As an alternative source of financial resource, the trade credit encourages the innovation activity of the enterprises. However, its impact could be opposite as well. The increase of intra-firm debts above certain sizes, particularly of the share of delayed and uncollectable debts becomes a factor, which moves the focus of the management attention from the opportunities of innovative development to insuring liquidity necessary for survival of the firm.

Suggested Citation

  • Galia Taseva, 2012. "Trade Crediting – Barriers to Its Use for Financing the Innovations," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 154-162.
    • Handle: RePEc:bas:econst:y:2012:i:3:p:154-162
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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