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Trade credit policies in the construction industry: A comparative study of Central-Eastern and Western EU countries Cover

Trade credit policies in the construction industry: A comparative study of Central-Eastern and Western EU countries

International Journal of Management and Economics
Volume 61 (2025): Issue 1 (March 2025)
By:  and    
Open Access
|Mar 2025
Figures & tables

Figures & Tables

Figure 1.

Expected mean values of selected financial ratios for construction industry compared with other industries. Note: BKL, short-term bank loan to assets ratio; D/A, total debt to assets ratio; LTD, long-term debt to assets ratio; STD, short term debt to assets ratio. Vertical bars represent 0.95 confidence intervals. Source: Authors’ calculations based on [BACH, 2023].

Figure 2.

Mean values of trade credit ratios in the construction industry across countries. Note: The mean values are calculated for all size groups of construction firms (S, M, L) and for all years available for a given region or country in the period 2000–2020. Source: Authors’ calculations based on [BACH, 2023].

One-way ANOVA results with the grouping factor as the classification of country as the CEE or WE EU member; values of F statistics and p-value are in parentheses

SizeDependent variable
NTCRECPAY
Small2.823 (0.094)1.626 (0.204)0.144 (0.704)
Medium1.676 (0.197)1.252 (0.264)0.341 (0.560)
Large5.932 (0.016)1.586 (0.209)17.84 (0.000)
All size groups2.432 (0.119)0.161 (0.688)3.184 (0.075)

Estimation results of panel regressions for the construction industry in WE countries

VariableModel (1a) NTCaModel (1b) RECModel (1c) PAY
EstimateStd. errorEstimateStd. errorEstimateStd. error
Const.0.249***0.0440.447***0.0350.175***0.021
BKL0.279**0.120
COL–0.320***0.030–0.532***0.038–0.214***0.024
INV–0.341***0.046–0.404***0.038–0.112***0.032
CSH –0.411***0.103–0.214***0.069
CGS–0.047**0.019 0.066***0.012
ROA0.250**0.103
TAT–0.037***0.0110.047***0.0110.067***0.007
SIZES*, L* S*** S***
CTNo PT*** LU**
YEAR2001*, 2010* 2016** No
No. obs.480 480 480
R2n/a 0.834 0.809
AIC–1876.2 –1777.5 –2066.1
Panel specification tests
Joint sign. of diff. group meansF(23, 451) = 1.9 [0.008] F(23, 451) = 7.4 [0.000] F(23, 451) = 12.5 [0.000]
Breusch-PaganLM = 7.1 [0.008] LM = 183.0 [0.000] LM = 393.4 [0.000]
Hausman test1.6 [0.895] 18.5 [0.001] 30.5 [0.000]
Joint significance robust F test
Size1.6 [0.208] 99.3 [0.000] 41.0 [0.000]
Country8.7 [0.000] 8.4 [0.008] 8.6 [0.006]
Year46.0 [0.000] 5.3 [0.030] 30.5 [0.000]

Definition of variables employed in the analysis

Variable characterSymbolSpecification
DependentNTCNet trade credit = (Accounts receivable – Accounts payable)/Assets
RECTrade credit supplied = Accounts receivable/Assets
PAYTrade credit obtained = Accounts payable/Assets
ExplanatoryBKLShort-term bank loan = Current amounts owed to credit institutions/Assets
COLCollateral = Fixed assets/Assets
INVInventory = Inventories/Assets
Firm-specific financial ratiosCSHCash at hand = Cash and available bank amounts/Assets
CGSCosts of goods sold = Costs of goods sold, materials and consumables/Net turnover
LEVDebt ratio = Debt/Equity
ROAReturn on assets = Net operating profit/Assets
TATTotal asset turnover = Net turnover/Assets
Dummy variablesSIZESize groups of firms (S, M, L)
CTCountries (AT, BE, CZ, DE, ES, FR, HR, IT, LU, PL, PT, SK)
YEARYears (2000, …, 2020)

Estimation results of panel regressions for construction industry in CEE countries

VariableModel (1a) NTCModel (1b) RECaModel (1c) PAY
EstimateStd. errorEstimateStd. errorEstimateStd. error
Const.0.243***0.0390.550***0.1100.178***0.020
COL–0.272***0.048–0.537***0.076–0.217***0.019
INV–0.349***0.056–0.421***0.082
CSH –0.423**0.203–0.284***0.081
CGS –0.077***0.028
LEV –0.094*0.053
ROA0.091**0.040
TAT–0.049***0.0100.046**0.0230.080***0.007
SIZENo No S***
CTSK* No HR***, SK*
YEAR2016*** 2012* 2017*
No. obs.210 210 210
R20.535 n/a 0.871
AIC–806.5 –722.2 –918.4
Panel specification tests
Joint sign. of diff. group meansF(11, 193) = 2.8 [0.002] F(11, 195) = 4.1 [0.000] F(11, 195) = 6.0 [0.000]
Breusch-PaganLM = 4.7 [0.030] LM = 25.3 [0.000] LM = 55.9 [0.000]
Hausman testH = 15.4 [0.009] 5.5 [0.137] 8.6 [0.035]
Joint significance robust F test
Sizen/a n/a 41.0 [0.000]
Country3.74 [0.079] n/a 8.6 [0.006]
Year12.67 [0.004] 4.3 [0.000] 3.2 [0.100]
DOI: https://doi.org/10.2478/ijme-2024-0023 | Journal eISSN: 2543-5361 | Journal ISSN: 2299-9701
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Language: English
Page range: 56 - 69
Submitted on: Feb 25, 2024
Accepted on: Jun 9, 2024
Published on: Mar 31, 2025
Published by: Warsaw School of Economics
In partnership with: Paradigm Publishing Services
Publication frequency: 4 issues per year
Keywords:
CEE vs. WE countries,
construction industry,
panel data models,
trade credit
Related subjects:
Business and economics,
Political economics,
Economic theory, systems and structures,
Business management,
Management accounting, financial controlling, cost calculation, investment

© 2025 Julia Koralun-Bereźnicka, Magdalena Gostkowska-Drzewicka, published by Warsaw School of Economics
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Volume 61 (2025): Issue 1 (March 2025)
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