Use of Trade Credit in Nigeria: A Panel Econometric Approach

Abstract

This study examines the determinants of trade credit use by randomly sampled quoted firms in Nigeria. Panel data framework was fitted to the secondary data obtained from 70 sampled firms for the period 2000-2009. The results indicate that trade credit use is influenced by depreciation provision, sales value, institutional loan, tangibility and current assets of non financial firms. Firms should endeavour to readjust their financial structure in order to benefit from the advantages of using trade credit.

Keywords: Trade credit, Account payable, Panel data, Nigeria.