Impact of Trade Credit on International Trade in Nigeria

14 Pages Posted: 11 Jan 2023

See all articles by Kunle Oguntegbe

Kunle Oguntegbe

University of Greenwich - University of Greenwich; affiliation not provided to SSRN

Adeolu O. Adewuyi

University of Ibadan

Kehinde Olagunju

Saint Istvan University

Oludele Folarin

University of Ibadan - Department of Economics

Date Written: February 1, 2020

Abstract

We analyse the impact of trade credit on international trade in Nigeria. Specifically, we quantify the impact of micro trade credit, measured by account receivables, bank credit and account payables on firms’ export and imports. Throughthe theoretical lens of the partial equilibrium theory, we performregression analysis on an unbalanced panel of 94 Nigerian listed firms within the period 2005-2012. Results reveal that account receivables are not significant in explaining changes in export, hence they are not major drivers of firms’ exports in Nigeria, whereas, firms’ imports will increase by 27.1% given one percent increase in account payable of the firm. Based on the empirical findings of this study, we recommend that Nigerian firms should take advantage of trade credit in order to boost their international trade, especially import.

Keywords: Trade credit, account receivables, account payables, bank credit

JEL Classification: F

Suggested Citation

Oguntegbe, Kunle Francis and O. Adewuyi, Adeolu and Olagunju, Kehinde and Folarin, Oludele, Impact of Trade Credit on International Trade in Nigeria (February 1, 2020). Available at SSRN: https://ssrn.com/abstract=4320976 or http://dx.doi.org/10.2139/ssrn.4320976

Kunle Francis Oguntegbe (Contact Author)

University of Greenwich - University of Greenwich ( email )

United Kingdom

affiliation not provided to SSRN

Adeolu O. Adewuyi

University of Ibadan ( email )

Department of Economics
Ibadan, OK Oyo State 900001
Nigeria

Kehinde Olagunju

Saint Istvan University ( email )

Páter K. srt.
Gödöllő, 12100
Hungary

Oludele Folarin

University of Ibadan - Department of Economics ( email )

Department of Economics
Ibadan, OK Oyo State 900001
Nigeria

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