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Finanse, Rynki Finansowe, Ubezpieczenia

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Trade Finance in the Polish Corporate Sector: Balancing Growth and Financing Constraints

DOI: 10.18276/frfu.2017.1.85-10
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ISSN:2450-7741
Authors: Paweł Mielcarz
Akademia Leona Koźmińskiego, Katedra Finansów

Dmytro Osiichuk
Akademia Leona Koźmińskiego w Warszawie
Keywords: trade finance receivables overtrading financing constraints
Issue / book publication date:2017
Page range:10 (107-116)
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Abstract

The paper studies the determinants of trade credit in the Polish corporate sector. In addition to the readily understandable transaction motive, we investigate the influence of the company’s liquidity, leverage and access to capital markets on its willingness to grant trade credit. Our findings suggest that firms actively adjust their trade receivables in order to avoid potential problems related to overtrading. We also find that more leveraged and more financially constrained companies are less likely to grant trade credit. Additionally, the paper studies the influence of the crisis settings on the dynamics of trade credit. We find that the outbreak of the crisis of 2008 caused companies to relax their trade credit policies which may speak in favour of the channelling theory of trade credit. The paper contributes to the on-going discussion on working capital management in the emerging economies.

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