Is accounts-receivable industry-specific or firm-specific?

This paper empirically examines whether the generally accepted finding that the firm’s accounts receivable tends to be industry-specific is valid for private mature Belgian firms between 2001 and 2008.The average accounts receivable of the firm’s industry in 2001 is not an important determinant in explaining the future accounts receivable of mature private Belgian firms. On the contrary we find that the accounts receivable of the firm in year 2001 is the most important variable in explaining the future accounts receivable of mature private Belgian firms. These results imply that the firm’s accounts receivable is only firm-specific. We also provide evidence on the importance of the variables used in many previous studies on accounts receivable in capturing the variability in the firm’s accounts receivable. The importance of the traditional variables in capturing the variability in accounts receivable is negligible. Our findings are robust for other European countries such as Sweden, The United Kingdom, France, Italy and Portugal. A tentative explanation for these findings is provided.