Discovering determinants of trade credit demand: Evidence from top managers insight

• Main Authors: Esmaeil Akhlaghi Yazdinejad, Hossein Jokar
• Format: Article
• Language: English
• Published: Taylor & Francis Group 2019-01-01
• Series: Cogent Economics & Finance
• Subjects: trade credit demand; internal factors; external factors; working capital
• Online Access: http://dx.doi.org/10.1080/23322039.2019.1650611

In resources consumption management, determining the volume of trade credit demand (TCD) is the main concern for financial managers. Despite the importance of TCD, it is not well explored in developing countries. Therefore, this paper investigates the internal and external factors affecting the amount of TCD. Qualitative research method and questionnaire were used to collect opinions of top managers about the factors determining the volume of TCD. SPSS and AMOS statistical tools were used to analyze the quantitative data collected from the questionnaire. Based on the results, internal factors such as available collaterals, inventory turnover, reorder point, and payable payment period affect the volume of TCD. Furthermore, external factors such as banks availability, customer monopoly, and living in metropolitans affect the volume of TCD.