The effect of corporate growth on trade credit according to the moderating role of shortage of liquidity

The purpose of this study is investigating the effect of the corporate growth on trade credit according to the moderating role of shortage of liquidity. It has been used to measure the corporate growth, the growth in fixed assets, and to measure the trade credit, the net balance of the trade credit, and finally, to measure the lack of liquidity, a dummy variable based on the ratio of cash to current assets. Finally, the hypotheses have been tested using the information of 153 firms admitted to the Tehran Stock Exchange during a 9-year period from 2013 to 2021 and a total of 1377 observations (year-company). Also, have been used to test the hypotheses, the econometric techniques of generalized moments (GMM) and Eviews software. The findings of this study showed that corporate growth has a positive and significant effect on trade credit, but lack of liquidity leads to the weakening of the positive relationship between corporate growth and trade credit. Based on the findings of the study, it can be seen that as the corporate growth increases, the supply of trade credit increases and thus the net balance of trade credit becomes positive. However, in the condition of lack of liquidity, growing firms reduce the supply of trade credit and increase the demand for receiving trade credit, and in this way, with the increase of accounts payable, the balance of trade credit becomes negative.