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

Author

Listed:
  • 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)

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.

Suggested Citation

  • Duliniec Aleksandra & Świda Natalia, 2021. "Factors influencing the use of trade credit in financing Polish listed companies," Economics and Business Review, Sciendo, vol. 7(1), pages 113-134, March.
    • Handle: 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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    References listed on IDEAS

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    More about this item

    Keywords

    trade payables; trade credit; sources of financing; Warsaw Stock Exchange;
    All these keywords.

    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

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