Determinants of trade credit supply among the Ghanaian construction sector
Built Environment Project and Asset Management
ISSN: 2044-124X
Article publication date: 2 September 2014
Abstract
Purpose
Trade credit (TC) provides access to capital for construction contractors globally and is an important source of finance in both developed and developing countries. The purpose of this paper is to explore key factors underpinning construction suppliers’ decisions to provide TC to Ghanaian construction firms.
Design/methodology/approach
Primary data from a structured survey of 75 construction suppliers are analysed. Principal component (factor) analysis explores complex structures among suppliers’ decision-making variables.
Findings
Underlying constructs of decision criteria exist among seven key factors: financial profile of the contractor; parties’ profit margins; asset portfolio and project particulars; TC quantum and repayment terms; age and experience of the contractor; contractor corporate image; and parties’ cash flows.
Originality/value
This is a new decision criteria framework for suppliers and contractors, who utilise TC.
Keywords
Citation
Owusu-Manu, D.-G., D. Holt, G., J. Edwards, D. and Badu, E. (2014), "Determinants of trade credit supply among the Ghanaian construction sector", Built Environment Project and Asset Management, Vol. 4 No. 4, pp. 368-383. https://doi.org/10.1108/BEPAM-11-2013-0057
Publisher
:Emerald Group Publishing Limited
Copyright © 2014, Emerald Group Publishing Limited