Data to replicate "Trade Credit Management and Information Asymmetry in Small and Medium-sized Businesses in An Emerging Market ", published by RBGN

Published: 23 September 2022| Version 2 | DOI: 10.17632/v5k629v4dd.2
Contributor:
Wesley Mendes-Da-Silva

Description

Data collected about Trade Credit Policy in Brazil (considering just SMEs). Our hypothesis are basically the following: Solving uncertainties for the buyer: H1: Companies that sell high quality, technology-based products give longer credit periods to allow the quality of the products to be checked before any actual payment is made. H2: Selling companies with less reputation give longer credit periods, when reputation is measured by way of metrics involving customer size and concentration. H3: Selling companies that have a high proportion of their external sales on credit give longer credit periods. H4: Selling companies that operate in highly seasonal markets give longer credit periods. Solving uncertainties for the seller: H5: Using cash-on-delivery (CoD) or cash-before-delivery (CbD) payment conditions is more common when the seller: (a) is smaller; (b) sells mainly to end users; and (c) has a larger proportion of foreign sales on credit. H6: The use of two instalment terms is associated with: (a) fewer days delay; and (b) selling mainly to smaller customers. Regarding price discrimination and trade credit policy, therefore, the following hypotheses are tested: H7a: The actual rate of interest on the immediate payment discount is positively associated with: i) the size of the selling company; ii) being one of the main players in the market; iii) adopting sales maximization (instead of risk reduction) as the main objective of credit; iv) customer concentration; v) negotiations with large customers; vi) negotiations mainly with wholesale buyers. H7b: The actual interest rate on immediate payment discount is negatively associated with: i) negotiations, mainly with the end user; ii) the proportion of foreign sales on credit.

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Institutions

Fundacao Getulio Vargas Escola de Administracao de Empresas de Sao Paulo

Categories

Finance, Entrepreneurship, Small Business Management

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