IMPACT OF FINANCIAL DISTRESS AND FINANCING CONSTRAINTS ON TRADE CREDIT
DOI:
https://doi.org/10.35794/jmbi.v10i1.44355Abstract
Purpose this study to examine the effect of (1) Financial Distress and (2) Financial Constraints on trade credit in companies listed on the Indonesia Stock Exchange (IDX). The Sampel in this study are all companies listed on the Indonesia Stock Exchange, except the banking and financing industries from 2020 to 2011. This study used the regression Fixed Effect Model to analyze secondary data from S&P Capital IQ. The study results show that (1) Financial Distress and Financial Constraint have a negative effect on Accounts Payable, (2) Financial Distress and Financial Constraint have a positive effect on Accounts Receivable.
References
Adiguzel, G. (2021). Credit Quality of Trade Receivables and Its Impact on Cash Holdings and Firm Value. International Journal of Business Administration, 12(2), 88.
Alamsyah, F., Saerang, I.S., Tulung, J. E. (2019). Analisis Akurasi Model Zmijewski, Springate, Altman, dan Grover Dalam Memprediksi Financial Distress. Jurnal EMBA : Jurnal Riset Ekonomi, Manajemen, Bisnis dan Akuntansi 7(2). https://doi.org/10.35794/emba.v7i2.49101
Altman, E. I. (2005). An emerging market credit scoring system for corporate bonds. Emerging Markets Review, 6(4), 311–323.
Astvansh, V., & Jindal, N. (2022). Differential Effects of Received Trade Credit and Provided Trade Credit on Firm Value. Production and Operations Management, 31(2), 781–798.
Atanasova, C. v., & Wilson, N. (2003). Bank borrowing constraints and the demand for trade credit: Evidence from panel data. In Managerial and Decision Economics (Vol. 24, Issues 6–7, pp. 503–514).
Boissay, F. (2007). Working Paper series, no 0753 / May 2007 Working papers series Trade Credit Defaults and Liquidity Provision By Firm and Reint Group
Bougheas, S., Mateut, S., & Mizen, P. (2009). Corporate trade credit and inventories: New evidence of a trade-off from accounts payable and receivable. Journal of Banking and Finance, 33(2), 300–307.
Casey, C., Bartczak, N., & Bartczakt, N. (1985). Using Operating Cash Flow Data to Predict Financial Distress: Some Extensions. In Source: Journal of Accounting Research (Vol. 23, Issue 1).
Devy Nilasari, M. haryanto. (2018). Memprediksi Perusahaan yang Berpotensi mengalami maslaah Keuangan dengan Model Altman, (DIPONEGOROJOURNAL OF MANAGEMENTVolume7, Nomor2,Tahun2018, Halaman1-11
el Ghoul, S., & Zheng, X. (2016). Trade credit provision and national culture. Journal of Corporate Finance, 41, 475–501.
Frank, M. Z., & Maksimovic, V. (2005). Trade Credit, Collateral, and Adverse Selection.
Furqan, I., Annuri, A., & Ruzikna, &. (2017). Analisi Penggunaan Metode Altman ( Z SCORE ) dalam Memprediksi Terjadinya Financial Distress Pada Perusahaan Minya Bumi dan Gas ( MIGAS ) yang Terdaftar di Bursa Efek Indonesia In Jom FISIP (Vol. 4, Issue 2).
Guo, C., Su, W., & Song, X. (2021). The substitution financing effect of suppliers’ trade credit on customers’ trade credit: Evidence from china. Journal of Business Economics and Management, 22(6), 1456–1475.
Hasan, M. M., Cheung, A., Tunas, L., & Kot, H. W. (2021 QQWW Firm life cycle and trade credit. Financial Review, 56(4), 743–771.
Karamoy, H., & Tulung, J. E. (2020). The Effect of Banking Risk on Indonesian Regional Development Bank. Banks and Bank Systems, 15(2), 130-137
Mojambo, G. A., Tulung, J. E., & Saerang, R. T. (2020). The Influence of Top Management Team (TMT) Characteristics Toward Indonesian Banks Financial Performance During the Digital Era (2014-2018). JMBI UNSRAT (Jurnal Ilmiah Manajemen Bisnis dan Inovasi Universitas Sam Ratulangi)., 7(1).
Hertzel, M. G., Li, Z., Officer, M. S., & Rodgers, K. J. (2008). Inter-firm linkages and the wealth effects of financial distress along the supply chain. Journal of Financial Economics, 87(2), 374–387.
Kamaluddin, A., Ishak, N., & Mohammed, N. F. (2019). Financial distress prediction through cash flow ratios analysis. International Journal of Financial Research, 10(3), 63–76.
Love, I., Preve, L. A., & Sarria-Allende, V. (2007). Trade credit and bank credit: Evidence from recent financial crises. Journal of Financial Economics, 83(2), 453–469.
Makori, D. M., & Jagongo, A. (2013). Working Capital Management and Firm Profitability: Empirical Evidence from Manufacturing and Construction Firms Listed on Nairobi Securities Exchange, Kenya. In International Journal of Accounting and Taxation (Vol. 1, Issue 1).
Makruf, A., & Ramdani, D. (2021). Analisis Perbandingan Financial Distress Pada Perusahaan Sub Sektor Rokok Periode 2015-2019. Business Innovation and Entrepreneurship Journal, 3(3), 157–163.
Masdupi, E., Tasman, A., & Davista, A. (2018). The Influence of Liquidity, Leverage and Profitability on Financial Distress of Listed Manufacturing Companies in Indonesia.
Molina, C. A., & Preve, L. A. (n.d.-a). Trade Receivables Policy of Distressed Firms and Its Effect on the Costs of Financial Distress.
Molina, C. A., & Preve, L. A. (n.d.-b). Trade Receivables Policy of Distressed Firms and Its Effect on the Costs of Financial Distress.
Osinubi, I. S. (2020). Effects of financial distress and financing constraints on trade credit provisions. Asian Review of Accounting, 28(4), 545–566.
Ozkan, A. (2000). An empirical analysis of corporate debt maturity structure. In European Financial Management (Vol. 6, Issue 2).
Steinker, S., Pesch, M., & Hoberg, K. (2016). Inventory management under financial distress: an empirical analysis. International Journal of Production Research, 54(17), 5182–5207.
Wilner, B. S. (n.d.). The Exploitation of Relationships in Financial Distress: The Case of Trade Credit.
Wu, W., Firth, M., & Rui, O. M. (2014). Trust and the provision of trade credit. Journal of Banking and Finance, 39(1), 146–159.
Zhang, Q., Dong, M., Luo, J., & Segerstedt, A. (2014). Supply chain coordination with trade credit and quantity discount incorporating default risk. International Journal of Production Economics, 153, 352–360.
Zhao, L., & Huchzermeier, A. (2019). Managing supplier financial distress with advance payment discount and purchase order financing. Omega (United Kingdom), 88, 77–90.
Zmijewski, M. E. (1984). Methodological Issues Related to the Estimation of Financial Distress Prediction Models. In Studies on Current Econometric Issues in Accounting Research (Vol. 22).
