Trade credit and determinants of profitability in Europe. The case of the agri-food industry

The objective of this paper is to analyse the effect that trade credit has on the determinants of profitability during the crisis period in Europe. We use panel data for a total of 24,177 European agri-food companies from 2010 to 2014. Among our main contributions, we highlight that we isolate the sector effect and study the country effect by separating the different policies and customs with respect to the granting of trade credit. The results confirm, in general, that trade credit affects profitability depending on the country and the characteristics of size, specificity, market power or reputation.