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The secret life of UK trade credit supply: Setting a new research agenda

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  • Paul, Salima
  • Boden, Rebecca

Abstract

Trade credit management represents an important strategic opportunity for firms to enhance performance, liquidity and profitability. This paper synthesises existing understandings of trade credit, with particular (but not exclusive) reference to the UK, with a view to identifying a research agenda in this field. The size, macroeconomic significance, absence of regulation and presence of significant internal risk associated with trade credit suggest that such an enhanced meta-level understanding of this substantial financial market that shadows regular business-to-business operations is imperative. The paper synthesises what is known about the basic parameters of trade credit operations, suppliers’ motivations and imperatives for granting credit to trade customers and the factors that determine credit periods and terms. We identify where further research would advance understanding in this area.

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  • Paul, Salima & Boden, Rebecca, 2008. "The secret life of UK trade credit supply: Setting a new research agenda," The British Accounting Review, Elsevier, vol. 40(3), pages 272-281.
    • Handle: RePEc:eee:bracre:v:40:y:2008:i:3:p:272-281
    DOI: 10.1016/j.bar.2008.05.007
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    5. Hoang, Cong Huan & Ly, Kim Cuong & Xiao, Qin & Zhang, Xuan, 2023. "Does national culture impact trade credit provision of SMEs?," Economic Modelling, Elsevier, vol. 124(C).
    6. Abdullah Al Mahmud & Muhammad Shahin Miah & Mohammad Rakib Uddin Bhuiyan, 2022. "Does Trade Credit Financing Affect Firm Performance? Evidence from an Emerging Market," IJFS, MDPI, vol. 10(4), pages 1-19, September.
    7. Cristina Martínez-Sola & Pedro García-Teruel & Pedro Martínez-Solano, 2014. "Trade credit and SME profitability," Small Business Economics, Springer, vol. 42(3), pages 561-577, March.
    8. Faryal Fahim & Batiah Mahadi, 2023. "Green Trade Credit and Sustainable Firm Performances During COVID-19: A Conceptual Review," Vision, , vol. 27(5), pages 593-603, November.
    9. Afrifa, Godfred Adjapong & Gyapong, Ernest & Monem, Reza M., 2018. "Product differentiation, market dynamics and the value relevance of trade payables: Evidence from UK listed firms," Journal of Contemporary Accounting and Economics, Elsevier, vol. 14(3), pages 235-253.
    10. Stefano Filomeni & Michele Modina & Elena Tabacco, 2023. "Trade credit and firm investments: empirical evidence from Italian cooperative banks," Review of Quantitative Finance and Accounting, Springer, vol. 60(3), pages 1099-1141, April.
    11. Mubashir Qurashi & Muhammad Zahoor, 2017. "Working Capital Determinants for the UK Pharmaceutical Companies Listed on FTSE 350 Index," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 7(1), pages 11-17, January.
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