The Determinants of Trade Credit: Evidence from Tunisian Export SMEs

The purpose of this research is to investigate the determinants of demand and approval of trade credit. The data used is both collected from the Promotion Export Center in Tunisia and based on self-administered questionnaire from 351 respondents. The results of logistic regression show that bank credit constraint and proximity influence positively the probability of trade credit request. However, high managerial competency affects negatively the probability of trade credit seeking. In addition, the findings highlight that the difficulties of companies in acceding to external source of finance are an important impediment behind trade credit approval. Finally, high sized companies that are managed by experienced managers have a great probability of access to trade credit. The analysis of this paper enhances the knowledge base of constrained companies to how accede to trade credit.