Determinants of access to trade credit for small and medium sized enterprises in Turkey after the 2008 global crisis

Abstract

This study aims to find out the determinants of access to trade credit for SMEs operating in Turkey after the 2008 Global Crisis. Firstly, theoretical framework on the concept of trade credit is given; and then the effects of the 2008 Global Crisis on access to trade credit for SMEs in Turkey are discussed widely. Following the literature review; Levin-Lin-Chu (LLC), Im-Pesaran-Shin (IPS) and Augmented Dickey Fuller (ADF) Fisher panel unit root tests, and Pedroni (1999) and Kao (1999) panel co-integration tests are used in the econometric analyses. Long term co-integration coefficients estimated by FMOLS methodology proposed by Pedroni (2000) show that there exists a statistically significant and positive relationship between access to trade credit and profitability. However, age, size and cash flow generating capability (of the company) affect (its) access to trade credit negatively.