An Analysis of Trade Credit Behaviour of Indian Firms

South Asia Economic Journal Pub Date : 2021-03-01 DOI:10.1177/13915614211009659

N. Kumar, Arvind Shrivastava, Purnendu Kumar, M. Bhatti

引用次数: 1

Abstract

Trade credit transactions are quite common for businesses. The article carries out the trade credit analysis for an emerging economy, namely Indian corporate sector employing rich information dataset covering multiple industries such as manufacturing, services, construction and others, since the period of financial crisis including both firm specific and macro-economic factors. The annual dataset spans 13 years from 2006 to 2018 covering the crisis period. Applying dynamic panel framework, it is found that the inventory management and macro indicators are significant in determining trade credit for Indian firms. While trade payable is chiefly driven by raw material inventory, firms having reasonable stock of raw or finished goods inventory are less likely to offer trade credit. Large-sized firms are found to be both leading consumers and suppliers of the trade credit. The pecking order theory is clearly validated with net profits being preferred over the trade credit that is a more expensive source of finance. Credit from formal financial sources is found to act as a substitute to trade credit borrowing. JEL: G3, G21, E4, C23

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印度企业贸易信用行为分析

贸易信贷交易对企业来说是很常见的。本文采用涵盖制造业、服务业、建筑业等多个行业的丰富信息数据集，对金融危机以来新兴经济体即印度企业部门的贸易信用进行分析，包括企业具体因素和宏观经济因素。年度数据集跨越了2006年至2018年的13年，涵盖了危机时期。应用动态面板框架，发现库存管理和宏观指标对印度企业的贸易信贷有显著影响。虽然应付贸易主要是由原材料库存驱动的，但拥有合理原材料或制成品库存的公司不太可能提供贸易信贷。研究发现，大型企业是贸易信贷的主要消费者和提供者。优先顺序理论显然得到了验证，净利润比贸易信贷更受青睐，后者是一种更昂贵的融资来源。研究发现，来自正式金融来源的信贷可以替代贸易信贷借款。Jel: g3, g21, e4, c23

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

South Asia Economic Journal Economics, Econometrics and Finance-Economics, Econometrics and Finance (all)

CiteScore

1.10

自引率

0.00%

发文量

期刊介绍： The South Asian nations have progressively liberalized their economies in recent years in an effort to integrate with the world economy. They have also taken steps to enhance multilateral and regional economic integration. Even though the South Asian economies have grown at an average rate of more than 5 per cent over the last few years, roughly 40 per cent of their people still live below the poverty line. Hence, the South Asian region continues to face many challenges of economic and social development. The South Asia Economic Journal (SAEJ) is designed as a forum for informed debate on these issues, which are of vital importance to the people of the region who comprise one-sixth of the world’s population. The peer-reviewed journal is devoted to economic analysis and policy options aimed at promoting cooperation among the countries comprising South Asia. It also discusses South Asia’s position on global economic issues, its relations with other regional groupings and its response to global developments. We also welcome contributions to inter-disciplinary analysis on South Asia. As a refereed journal, SAEJ carries articles by scholars, economic commentators,policy-makers and officials, from both the private and public sectors. Our aim is to create a vibrant research space to explore the multidimensional economic issues of concern to scholars working on South Asia. Among the issues debated in relation to South Asia are: - the implications of global economic trends; - the issues and challenges by WTO; - approaches to industrialization and development; - the role of regional institutions such as the SAARC; - the relationship between SAARC and other regional economic groupings such as ASEAN; - the implications of economic liberalization for trade and investment in the region; - new initiatives that can be launched to enhance economic cooperation among the South Asian countries both on a bilateral and a regional basis.