Trade credit and performance of firms in Nigeria
European Journal of Economics, Finance and Administrative Sciences
Obafemi Awolowo University, Ile-Ife, Osun State, Nigeria
This study analyzed the effect of trade credit on firm's performance. Panel data framework was fitted to the secondary data obtained from 70 sampled firms for the period 2000-2009. Data collected were analyzed using panel econometric approach of fixed effect, random effect and Hausman test. The result indicates that trade credit positively influenced Net Profit Margin (NPM), return on investment (ROI) and return on capital employed (ROCE) by firms. The finding implied that trade credit financing is an integral part of doing business for firms especially those that find raising funds from the credit market difficult and could not generate adequate internal funds for their working capital requirements. © EuroJournals, Inc. 2012.