Delaying Payments in the European Union: An Empirical Dynamic Panel Data Analysis 1

We analyse delaying payments of accounts receivable by combining macroeconomic shocks with firm characteristics controls. We use microeconomic dataset on financial statements of selected firms in European Union member states from AMADEUS for the period 2005 - 2014, and employ the system Generalized...

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Bibliographic Details
Published inEkonomický časopis Vol. 65; no. 10; pp. 952 - 971
Main Author Obeng, Isaac Kwame Essien
Format Journal Article
LanguageEnglish
Published Bratislava Slovak Academy of Sciences, Institute of Economic Research 30.11.2017
Subjects
Accounts payable
Accounts receivable
Customers
Data analysis
Default
Economic crisis
EU membership
Generalized method of moments
Growth models
Inventory
Literature reviews
Longitudinal studies
Macroeconomics
Market positioning
Order quantity
Studies
Working capital
Europe
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Summary:We analyse delaying payments of accounts receivable by combining macroeconomic shocks with firm characteristics controls. We use microeconomic dataset on financial statements of selected firms in European Union member states from AMADEUS for the period 2005 - 2014, and employ the system Generalized Method of Moments (GMM) framework to analyse the dynamic models. The empirical results show positive impact of the financial crisis on delaying payments. The two-step System GMM estimator obtain significance positive estimates of the coefficient of lagged late payment. Also, we identify significance positive relationship between late payment and firm performance measures of current ratio and gearing ratio, but negative relationship between late payment and firm turnover. The results suggest firms that delay in payments might have the tendency to delay in future payments.
ISSN:0013-3035