Trade Finance in the Polish Corporate Sector: Balancing Growth and Financing Constraints
Trade Finance in the Polish Corporate Sector: Balancing Growth and Financing Constraints

Summary/Abstract: The paper studies the determinants of trade credit in the Polish corporate sector. In addition to thereadily understandable transaction motive, we investigate the influence of the company’s liquidity, leverageand access to capital markets on its willingness to grant trade credit. Our findings suggest that firms activelyadjust their trade receivables in order to avoid potential problems related to overtrading. We also find thatmore leveraged and more financially constrained companies are less likely to grant trade credit. Additionally,the paper studies the influence of the crisis settings on the dynamics of trade credit. We find that theoutbreak of the crisis of 2008 caused companies to relax their trade credit policies which may speak in favourof the channelling theory of trade credit. The paper contributes to the on-going discussion on working capitalmanagement in the emerging economies.

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