Factors for Trade Debts of Firms and Possibilities of Reduction of Interfirm Indebtedness(English)
AbstractThe article highlights the basic theoretical principles for firm financing with trade credit and the results of empirical research by the method of multiple regression analysis of factors, influencing the level of trade indebtedness of Bulgarian non-financial enterprises. Models are constructed that have been tested for two consecutive years, separately for SME and for big enterprises that allow incorporation in the analysis of the distinctions between them, including the access to institutional financing, the quality of management etc. Some of the main conclusions of the investigation are that trade credit is a substitute for institutional financing and that firms take trade credits from other firms to finance their own trade receivables and to hedge the risk. Together with the risky management of the financial structure of SME this is a prerequisite for generation of chains of arrears. Possibilities for reduction of the interfirm indebtedness and regulation of its size in the future are also formulated.
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Bibliographic InfoArticle provided by Bulgarian Academy of Sciences - Economic Research Institute in its journal Economic Thought.
Volume (Year): (2012)
Issue (Month): 6 ()
Find related papers by JEL classification:
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G39 - Financial Economics - - Corporate Finance and Governance - - - Other
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