A review of trade credit literature: Opportunities for research in operations

• We provide an integrative review of the existing literature of trade credit in the interface of operations and finance.
• We analyze in detail four literature areas: trade credit motives, order quantity decisions, credit term decisions and settlement period decisions.
• The main findings of the literature review is that trade credit increases the economic order quantity and could serve as a buyer–supplier coordination mechanism.
• We derive a detailed agenda for future research around two core themes: opportunities arising from inside operations management and opportunities arising from outside operations management.

Trade credit arises when a buyer delays payment for purchased goods or services. Its nature has predominantly been an area of inquiry for researchers from the disciplines of finance, marketing, and economics but it has received relatively little attention in other domains. In our article, we provide an integrative review of the existing literature and discuss conflicting study outcomes. We organize the relevant literature into seven areas of inquiry and analyze four in detail: trade credit motives, order quantity decisions, credit term decisions, and settlement period decisions. Additionally, we derive a detailed agenda for future research in these areas.