Trade Credit as a Determinant of Firm’s Financial Performance: Moderating Role of Bank Financing

Farooq, Umar; Ahmed, Jaleel; Ashfaq, Khurram; Tabash, Mosab I.

doi:10.1177/09721509211036860

Cited by 8 publications

(10 citation statements)

References 47 publications

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“…All these measures have been used in prior studies (Bui, 2020; Pan et al. , 2020; Farooq et al. , 2021).…”

Section: Sample and Research Methodologymentioning

confidence: 99%

Supply chain finance, firm performance and industry competition: empirical evidence from Pakistan

Sajid,

Safdar

2023

BPMJ

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PurposeThis study empirically tests the relationship between supply chain finance (SCF) and firm performance. Moreover, this study also investigates the potential role of industry competition in the proposed relationship between SCF and firm performance.Design/methodology/approachA conceptual framework is developed and tested using secondary data collected from 122 non-financial listed firms on the Pakistan Stock Exchange (PSX) for the period of ten years (2012–2021). Ordinary least squares (OLS) regression analysis is performed in STATA to validate the proposed relationships.FindingsThe results highlight that SCF has a positive impact on firm performance. Moreover, industry competition positively moderates the relationship between SCF and firm performance.Practical implicationsThis study would help firms in assessing the value of operational financing to their financially constrained suppliers/customers by adopting supply chain finance practices. Furthermore, this study will help understand the role of the competitive environment in supply chain finance decision-making.Originality/valueThe findings will help core firms better understand how implementing SCF benefits firm performance under high product competition, especially in emerging markets.

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“…All these measures have been used in prior studies (Bui, 2020; Pan et al. , 2020; Farooq et al. , 2021).…”

Section: Sample and Research Methodologymentioning

confidence: 99%

Supply chain finance, firm performance and industry competition: empirical evidence from Pakistan

Sajid,

Safdar

2023

BPMJ

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“…Moreover, Farooq et al . (2021) found that Asian firms that improve their trade credit activities perform better financially.…”

Section: Theoretical Framework and Hypothesesmentioning

confidence: 99%

“…Saeed and Zureigat (2020) document that CSR positively affects the buyer and supplier sides of trade credit. Moreover, Farooq et al (2021) found that Asian firms that improve their trade credit activities perform better financially.…”

Section: Corporate Social Responsibility and Financial Distressmentioning

confidence: 99%

Corporate Social Responsibility Rating, Corporate Governance, and Financial Distress: Evidence from China

Chi

Khalil

Erraja

2023

Asia-Pac J of Fin Stud

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This study investigates the relationship between corporate social responsibility (CSR) and financial distress in China using the O‐score and a Chinese sample of 4202 observations between 2011 and 2017. The relationship is accordingly more pronounced in weak corporate governance firms with low levels of institutional shareholders and free cash flow and among non‐state‐owned enterprises and mandatory CSR disclosure firms. The findings are robust to endogeneity through robustness checks and the 2013 Sichuan Lushan earthquake as an exogenous shock to CSR. Ultimately, the study will help investors, shareholders, and policymakers appreciate the impact of CSR dimensions.

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“…These are: Character, capacity, collateral, capital and condition. Character basically is a tool that provides weighting values for various characteristics of a client appraisal and the total weighted score of the applicant is used to estimate his credit worthiness (Farooq & Ahmed, 2021). This is the personal impression the client makes on the potential lender.…”

Section: Credit Standardsmentioning

confidence: 99%

Effect of Credit Management on Financial Performance of Commercial Banks in Eldoret, Kenya

Lagat

Bogongo

2023

IJF

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Purpose: The main aim of the current study was to find out the effect of credit management on financial performance of commercial banks in Eldoret, Kenya. The study specifically focused on finding out the effects of credit terms, credit standards and collection policy on financial performance of commercial banks operating in Eldoret. The study was guided by both Asymmetric Information Theory, Credit Scoring Theory and Theory of Performance. Methodology: A descriptive survey design was employed in the study with the target population comprising of 30 licensed commercial banks operating in Eldoret. The unit of observation comprised all branch managers and credit officers from each commercial bank making a total of 177 respondents. A census approach was employed where all the units of observation were included in the study. Both primary and secondary data was utilized in the study where questionnaires collected primary data whereas a secondary data collection sheet was utilized to gather secondary data from printed sources. The data collected was analyzed through both descriptive and inferential statistics. In the study, the descriptive statistics comprised of means, average and standard deviation whereas the inferential statistics comprised of regression correlation analysis. Both MS Excel and SPSS Software v25 was utilized to generate the statistics. The results of the study were presented in form of tables and figures. Findings: The study established that credit terms, credit standards and collection policy affects financial performance of commercial banks in Eldoret to a positive and significant level. This depicted by beta values of 0.336, 0.404 and 0.304 and significance values of 0.000, 0.000 and 0.003 respectively. Unique contribution to theory, practice and policy: The results have the implications that the levels of financial performance of the commercial banks increases with the respective beta values following a unit increase in any of the independent variables. The study provided recommendations to the management of commercial banks operating in Eldoret to enhance the levels of practices surrounding credit terms, credit standards and collection policy since the practices translates into improved financial performance.

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Trade Credit as a Determinant of Firm’s Financial Performance: Moderating Role of Bank Financing

Cited by 8 publications

References 47 publications

Supply chain finance, firm performance and industry competition: empirical evidence from Pakistan

Supply chain finance, firm performance and industry competition: empirical evidence from Pakistan

Corporate Social Responsibility Rating, Corporate Governance, and Financial Distress: Evidence from China

Effect of Credit Management on Financial Performance of Commercial Banks in Eldoret, Kenya

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