Financing from Suppliers during Covid-19 Pandemic: Evidence from Bulgarian Listed Firms
Financing from Suppliers during Covid-19 Pandemic: Evidence from Bulgarian Listed Firms

Author(s): Galya Taseva
Subject(s): Economy, Business Economy / Management
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: trade credit; supplier financing; financial performance; Covid-19; Bulgaria
Summary/Abstract: The article examines which firms rely more heavily on supplier financing and how the crisis caused by the Covid-19 pandemic has affected supplier financing for these firms. The research is based on information about manufacturing companies listed on the stock exchange in Bulgaria for the period 2018 - 2021. The results of the research show that companies that are net debtors on trade credit have worse financial indicators. Accounts payable of companies net debtors to suppliers have shrunk in absolute terms in both years since the start of the pandemic. But for companies that are net debtors on trade credit, the reduction in payables to suppliers is much smaller than the reduction in loans to banks and other financial institutions in the first year of the pandemic. In the first year of the pandemic, when the initial shock to the economy was the strongest, the relative importance of trade credit as a source of financing for firms with poorer financial performance and lower creditworthiness grew.

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