Background and problem: Today, the biggest sales between businesses and between businesses and the public sector are through trade credit. As a result, companies are often exposed to risk in the form of late and missing payments. In such situations, there is a need for mechanisms of risk reduction to reduce and minimize these risks. The mechanisms of risk reduction are divided into private and public risk reduction. The point with this dissertation is to show which of these mechanisms that have the greatest impact on the decision making of trade credit. This study is the first in Sweden to implement this type of investigation.
Purpose: The point with this paper is to investigate, analyze and evaluate which of the private or public mechanisms of risk reduction those have the greatest impact on decision making on trade credit.
Method: The epistemological view which has been the basis for our study is positivism. The positivistic approach has led to a hypothetical-deductive approach with a quantitative method, chosen to obtain the results and analysis.
Theoretical perspective: Our study is based on an eclectic theoretical approach and previous research in the area. We use theory to outline the descriptive part of our study. Our theory about the private and public mechanisms of risk reduction will also be included in this chapter.
Empirical: The empirical material is based on a survey where a web-questionnaire was distributed to various companies. The material was then analyzed by statistical tests.
Results: The majority of respondents replied that the public mechanisms of risk reduction did not affect their decision making on trade credit while the private mechanisms of risk reduction to some degree did affect the decision making on trade credit. There is a relatively low risk in the Swedish economy, which can explain why the mechanisms of risk reduction had relatively low impact on decision making on credit trade.
|Date of Award||2012-Nov-07|
|Supervisor||Fredrik Jörgensen (Supervisor) & Pernilla Broberg (Examiner)|
- Degree of Bachelor of Science in Business and Economics
- 15 HE credits
Swedish Standard Keywords
- Business Administration (50202)
- mechanisms of risk reduction
- trade credit
- legal self-efficiency
- business network