A review of trade credit literature: Opportunities for research in operations

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Abstract

Trade credit arises when a buyer delays payment for purchased goods or services. Its nature has predominantly been an area of inquiry for researchers from the disciplines of finance, marketing, and economics but it has received relatively little attention in other domains. In our article, we provide an integrative review of the existing literature and discuss conflicting study outcomes. We organize the relevant literature into seven areas of inquiry and analyze four in detail: trade credit motives, order quantity decisions, credit term decisions, and settlement period decisions. Additionally, we derive a detailed agenda for future research in these areas.

Keywords: Trade credit; Permissible delay in payment; Interface operations and finance


Link to material: http://www.sciencedirect.com/science/article/pii/S0377221713002245