Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/314139 
Year of Publication: 
2021
Citation: 
[Journal:] Journal of Applied Economics [ISSN:] 1667-6726 [Volume:] 24 [Issue:] 1 [Year:] 2021 [Pages:] 441-459
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
We demonstrate that the "predator-prey" metaphor may be well-suited to describe trade finance mechanisms in emerging economies. Having analyzed the dynamics of trade credit in the Polish corporate sector over the period between 1997 and 2014, we found that suppliers of trade credit were smaller, younger, less liquid, less indebted, and more financially constrained than the beneficiaries thereof. The firms, which increased trade receivables during the analyzed period, improved their asset turnover ratio at the expense of operating profitability. In a quest for growth and cash flows, these firms appear to be forced to supply trade credit to their counterparties with a stronger bargaining position. Companies, which reported higher trade payables, enjoy higher cash flows and a better access to external financing, yet with no improvements to the operating KPIs. In contrast to the conventional wisdom, we hypothesize that trade credit bargaining may be a negative-sum game.
Subjects: 
emerging economy
Trade credit
working capital
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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