Acceso usuarios
Justino Manuel de Oliveira Marques
This paper proposes to elect the days to pay accounts payable determinants and our findings strongly support that the accounts payable problematic is closely related to short term financial decisions with a positive and significative influence of firm�s profitability and size factors. The existence of a firm�s negative working capital is confirmed to influence strongly the reduction of the trade credit obtained from suppliers in Western Europe countries in parallel with a joint contribution of short and long term bank financing as a substitute from trade debt. Firm characteristics related to negative working capital and fixed assets level, jointly or alone, give more importance to the role of short term bank financing on substituting or reducing the volume of trade credit obtained from suppliers. Negative working capital reinforces the role of long term bank financing. It seems to induce the presence of a corporate cost reduction strategy to preserve or increment the firm�s market reputation and competition. The firm�s return on assets implies an enlargement of the days to pay accounts payable in line with a rising creditworthiness. All interacted variables are responsible for the reduction of the days to pay accounts payable and the confirmation of the financial substitution effect introduces more financing discipline compatible with firm�s cost reduction strategy and pricing motives included in a price discrimination strategy. Signs of future unbalanced capital structure and financial distress may appear due also to the more banking financing justified by firm�s investment and negative working capital under finance motives point of view. The more firm�s growth the less trade credit obtained and, on the contrary, profitability and size contribute to facilitate the trade credit obtained from suppliers under finance and pricing motives point of view, more over the stability on terms trade credit. As important as the days to pay accounts and/or days sales outstanding determinants are future investigations related to trade credit duration gap as a synthesis of the prior trade credit issues, to country and economic sector or union analysis, as well.
