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2020•Socio-Economic AnalysesRequires access

Innovation and Trade Credit

BAS, Bulgaria, Galya Tseva

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Abstract

The article examines the relationship between trade credit and SMEs’ innovation activity in Bulgaria. The results of the empirical study show a positive statistically significant relationship between the cost of innovation and the size of trade receivables and payables of firms that are net debtors of trade credit, but not for firms that are net lenders. In addition, companies that have developed innovative products and services are more likely to use the services of factoring companies. Trade credit is important for the innovation activity of SMEs who have difficulty securing financial resources.

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What this paper is about

The article examines the relationship between trade credit and SMEs’ innovation activity in Bulgaria. The results of the empirical study show a positive statistically significant relationship between the cost of innovation and the size of trade receivables and payables of firms that are net debtors of trade credit, but not for firms that are net lenders. In addition, companies that have developed innovative products and services are more likely to use the services of factoring companies. Trade credit is important for the innovation activity of SMEs who have difficulty securing financial resources.

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Available abstract

The article examines the relationship between trade credit and SMEs’ innovation activity in Bulgaria. The results of the empirical study show a positive statistically significant relationship between the cost of innovation and the size of trade receivables and payables of firms that are net debtors of trade credit, but not for firms that are net lenders. In addition, companies that have developed innovative products and services are more likely to use the services of factoring companies. Trade credit is important for the innovation activity of SMEs who have difficulty securing financial resources.

Key concepts: Factoring, Trade credit, Accounts receivable, Accounts payable, Business, Finance, Payment

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