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Purpose The purpose of this paper is to examine the determinants and motives for supply of trade credit among agro-food manufacturing firms in African countries. Design/methodology/approach The paper uses a subsample of food manufacturing firms from World Bank Enterprise Survey in eight African countries in 2014. Two-limit Tobit models are specified for the determinants of trade credit supply (TCS) and the motives for TCS are inferred from the determinants. An instrumental variable two-limit Tobit model is estimated to check the endogeneity of trade credit received (TCR) in relation to trade credit supplied. Findings The level of TCS is significantly related with degree of product diversification, manager experience, level of TCR and overdraft availability. From the results, financing motives (particularly liquidity and redistribution) and commercial motives (particularly marketing and quality guarantee motives) for TCS are implied. Research limitations/implications The parameter estimates may contain both demand and supply effects as the two effects cannot be separated due to absence of information on firms’ customers in the data set. The results should be interpreted in this context. Originality/value The motives for TCS by agro-food firms is less understood in the agricultural finance literature and this paper makes an important contribution in this regard. In particular, the paper shows the degree of product diversification is directly associated with TCS, a relationship which has not been explored in the trade credit literature.

We use patent data to study product, process, and marketing innovation in the food and drink industry. From 1994 to 2005, only 61 of 194 U.S. public food and drink manufacturers patented some type of innovation. Furthermore, we find patent ownership is most common to large corporations, and most patented innovations relate to new designs and processes as opposed to new products. According to our empirical panel analysis, however, stock market investors find patent ownership of new product innovations the most valuable, although the intensity of patent ownership is not of utmost importance. Instead, we conclude patent quality is better able to explain variability in the stock market valuation of U.S. food and drink manufacturers. Specifically, a one-percent increase in the quality of patented innovations in food and drink products facilitates a 0.07 % increase in firm value, corresponding to almost $6 million for the mean innovating firm in the U.S. public food and drink industry.

This paper explored innovations offered by microfinance institutions (MFIs) operating in the three northern regions of Ghana. A sample of 41 MFIs comprising savings and loans companies, credit unions, and rural banks were surveyed. Data were analysed using descriptive statistics and analysis of variance (ANOVA). The study found that MFIs in the three northern regions have introduced a wide range of innovations in the past 3 years. These innovations that have been employed at varying degrees include product innovation (savings, and loans), marketing innovations, microinsurance, location innovation, and R&D innovation. On the basis of the introduction of new loan products in the past 3 years, 4.9%, 39%, 36.6%, and 19.5% of MFIs were found to be potential innovators, slow innovators, moderate innovators and high innovators respectively. The study established significant relationship between company characteristics such as frequency of board meetings, educational profile of staff, ownership structure, number of branches/outlets, years of operation, company location, and

The paper examines the effect of locating in industrial cluster and holding production/ supply contract on access to trade credit by informal firms in Ghana. It employs data from the 2013 World Bank survey of informal firms in Ghana. The results show that trade credit is the most important external source of financing working capital for firms in the informal sector. Binary probit was employed in the econometric analysis. Controlling for firm characteristics, financial characteristics, firms' largest owners' characteristics, industrial sector and geographical location, the results show that both locating in industrial cluster and holding production/supply contract significantly increase access to trade credit by informal firms. Other variables significantly associated with access to trade credit include firm age, number of owners, ownership of location, access to loans from banks and friends, and firms' largest owners' characteristics -formal employment status, marital status and educational status. Based on the results, policies focused on promoting the development of industrial clusters can help informal firms to mitigate their credit constraint through increased access to trade credit. Informal firms can also mitigate their credit constraint via trade credit by obtaining production/supply contracts.