Determinants of Trade Credit Extended by Manufacturing Firms Listed in Pakistan

Ahmad, Nisar; Afza, Talat; Nafees, Bilal

doi:10.22547/ber/9.4.13

Cited by 4 publications

(10 citation statements)

References 41 publications

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“…Outcomes of the research are not in accordance with the liquidity motive. 2 The findings of the panel EGLS indicate that short-term bank credit positively and significantly influences the trade credit extended in the listed chemical companies. The examined findings indicate an increase in short-term bank credit for day-today business activities has a positive impact on the trade credit extended and boosts it about 0.019 percent in the listed (Ghosh, 2015)established that trade credit and bank credits are more complements and less substitute for each other.…”

Section: Trade Credit Extendedmentioning

confidence: 96%

“…Latter, Martínez-Sola et al (2014) also analyzed the impact of profitability on trade credit extended and found identical results. Whereas in the case of trade credit used, suppliers provide trade credit to those firms, which have a better financial position (Ahmad & Afza, 2018).…”

Section: Trade Creditmentioning

confidence: 99%

“…Prior literature related to trade credit has explored trade credit's connection with different variables such as monetary policy, financial distress, bank credit, sales growth, profitability, culture, ethnicity, and leverage (Ahmad et al, 2017). Several researchers have aggressively explored trade credit since the mid of the twentieth century.…”

Section: Trade Creditmentioning

confidence: 99%

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Impact of Human Perspective of Intellectual Capital on Trade Credit With Moderating Role of Profitability in Pakistan

Masood

Siddiqui

2021

HSSR

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Purpose: This paper analyzes the impact that human capital has on trade credit in Pakistan's chemical sector. Human capital is a component of intellectual capital. Methodology: HC or Human Capital is taken as an independent variable. The dependent variable is trade credit. Trade credit has two types: Trade Credit Used (TCU) and trade credit extended (TCE). Other variables are also used, such as profitability (PROF), short-term bank credit (SBC), financial leverage (LEV). For empirical investigation, balanced panel data is used for the time 2010 to 2019. For obtaining econometric outcomes, we applied the static panel in E-views. Main Findings: The results indicate that short-term bank credit, leverage, and the interaction term of human capital and profitability create a positive impact with the used trade credit and TCE, while the impact of profitability and human credit on trade credit used is negative. Trade credit extended profitability is moderating the relationship of human capital and trade credit. Implications/Applications: This study has great importance for firm managers, policymakers, investors, academicians, and scholars in the selected sector of Pakistan. Novelty/Originality of this study: The study recommends the efficient, effective utilization of human capital and trade credit to gain a comparative advantage.

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Section: Trade Credit Extendedmentioning

confidence: 96%

Section: Trade Creditmentioning

confidence: 99%

Section: Trade Creditmentioning

confidence: 99%

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Impact of Human Perspective of Intellectual Capital on Trade Credit With Moderating Role of Profitability in Pakistan

Masood

Siddiqui

2021

HSSR

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“…For investigating the impact of FD on the CR by manufacturing firms listed on PSX, we used a data set of 320 LMFs for the period from 2005 to 2018. The choice of LMFs is consistent with Ahmad and Afza (2018). For the selection of sample and the choice of the study period, we followed the scheme of our earlier study (Ahmad, Afza & Nafees, 2017).…”

Section: Samplementioning

confidence: 99%

“…The choice of LMFs is consistent with Ahmad and Afza (2018). For the selection of sample and the choice of the study period, we followed the scheme of our earlier study (Ahmad, Afza & Nafees, 2017).…”

Section: Samplementioning

confidence: 99%

Credit Redistribution by Listed Manufacturing Firms in Pakistan and the Moderating Role of Financial Depth

Ahmad¹,

Nafees²,

Rasheed³

2020

BER

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An enhancement in the financial depth (FD) increases the availability of formal credit to firms. Resultantly credit redistribution (CR) by firms is likely to be reduced as they require less trade credit (TC). To provide evidence, how do managers respond to changes in financial depth while making adjustments in their trade credit policy, this paper aims to study the impact of financial depth on credit redistribution by listed manufacturing firms (LMFs). For the firm-level variables, we used a data set of 327 firms listed on PSX for the period 2005 to 2018. Private credit to GDP ratio and market capitalization to GDP ratio are used as proxies for financial depth. Unlike earlier studies, we applied a two-step System GMM estimator to control the endogeneity. The results of the regression analysis display a positive relationship between the use and the supply of trade credit by LMFs. It reveals that LMFs redistribute credit to their customers through trade credit channel. We found a significant and negative impact of FD on the supply of TC by LMFs. Further, we established that financial depth as a moderator has a buffering impact on the credit redistribution by listed firms. The study highlights the moderating role of FD and suggests the financial policymakers of firms to modify their credit policies in response to changes in financial depth. For future research, we suggest the investigation of the effect of financial policy interventions on credit redistribution by small and non-listed firms.

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Information technology investment and rural bank performance in Ghana: the moderating role of ICT diffusion and financial development

Annor,

Agyapong,

Robaina

et al. 2024

JEAS

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PurposeThis study sought to examine the interaction between rural bank performance, information and communication technology (ICT) investment, ICT diffusion and financial development.Design/methodology/approachData were sourced from the Association of Rural Banks (ARB) Apex and World Development Indicators (WDI) for the period 2014–2020. A total of 122 rural banks were used for this study. The study adopted the two-step system generalized method of moments (SGMM) estimation technique in assessing the interactions among variables.FindingsThis study found compelling evidence to support the positive effect of ICT investment on banks’ performance (return on asset and net interest margin). Further, ICT diffusion and financial development positively influence banks’ performance. The results show a positive moderating effect exerted by ICT diffusion and financial development on the impact of bank risk (bank stability) and ICT investment on all three performance measures.Originality/valueThe study focuses on the rural banking sector in the Ghanaian economy, compared to related studies that examine the subject matter for commercial banks. The moderating effects of ICT diffusion and financial development are assessed to guide policy on rural banking development in Ghana.

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Determinants of Trade Credit Extended by Manufacturing Firms Listed in Pakistan

Abstract: Abstract

Cited by 4 publications

References 41 publications

Impact of Human Perspective of Intellectual Capital on Trade Credit With Moderating Role of Profitability in Pakistan

Impact of Human Perspective of Intellectual Capital on Trade Credit With Moderating Role of Profitability in Pakistan

Credit Redistribution by Listed Manufacturing Firms in Pakistan and the Moderating Role of Financial Depth

Information technology investment and rural bank performance in Ghana: the moderating role of ICT diffusion and financial development

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