Late trade credit payments linked to market power and cost-shifting tactics.
Trade credit late payment behavior in firms is influenced by industry structure. The study used data from Dun & Bradstreet to show that firms delay payments to suppliers based on market power and cost-shifting. Firms strategically choose when and to whom to delay payments. The research suggests that managers should be cautious about late payments when making trade credit contracts with customers, as suppliers are in a weaker position compared to banks.