Abstract
This study aims to examine the motivation factors of firms to extend trade credit to their clients. Data are collected of
150 manufacturing firms listed at Pakistan Stock Exchange for the period 2005 to 2016. Using dynamic panel
estimation, the study finds that firms are offering trade credit considering the commercial motives and helping hand
motive, whereas large firms are found to be reluctant to extend trade credit. The role of concentrated markets does not
prove in granting trade credit. This study also examines the impact of previous period trade credit and found to have a
positive relationship, which suggests that previous credit relationships do matter for short term financing. The results
of the study are useful to academic researchers and managers in specific areas of trade credit management and working
capital management in general.
Ammara Mubashar, Sumayya Chughtai, Faid Gul. (2019) An Empirical Investigation on Motives of Trade Credit Usage of Pakistani Manufacturing Sector, Paradigms , Vol 13, Issue 1.
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