Affiliation:
1. Social Sciences Vocational School, Gaziantep University, 27310 Gaziantep, Turkey
Abstract
This study investigates the relationship between trade credit and sustainable economic growth, bank credit extension, and imports in the context of 15 European non-financial sectors spanning 2005Q1 to 2019Q2. Furthermore, it attempts to unveil the nonlinear relationship between trade and bank credit extension. To achieve these aims, balanced panel data are constructed and second-generation panel data are used to analyze Panel AMG Estimation, and an improved panel causality test for heterogeneous panels is employed. To enhance the robustness of the study, the results are scrutinized on a country-specific basis. The findings revealed a positive relationship between trade credit and both sustainable economic growth and imports, whereas a negative correlation was found with bank credit extension. These divergent outcomes at the country level were thoroughly discussed. Finally, a bilateral causality is identified between trade credit and economic growth, bank credit extension, and total manufacturing production, whereas a unidirectional causality is found with import activities.
Subject
Management, Monitoring, Policy and Law,Renewable Energy, Sustainability and the Environment,Geography, Planning and Development,Building and Construction
Reference72 articles.
1. Do Firms Use the Trade Credit Channel to Manage Growth?;Ferrando;J. Bank. Financ.,2013
2. Tingbani, I., Afrifa, G.A., Tauringana, V., and Ntim, C. (Int. J. Financ. Econ., 2022). Trade Credit and Corporate Growth, Int. J. Financ. Econ., Early View.
3. Trade Credit in Corporate Financing in South Africa: Evidence from a Dynamic Panel Data Analysis;Kwenda;Invest. Manag. Financ. Innov.,2014
4. Trade Credit in China: Exploring the Link between Short Term Debt and Payables;Tang;Pac. Basin Financ. J.,2020
5. Is Working Capital Management Value-Enhancing? Evidence from Firm Performance and Investments;Aktas;J. Corp. Financ.,2015