Article: Short-term financing structure and trade credit dynamics in an emerging market: a nonlinear perspective Journal: International Journal of Economics and Business Research (IJEBR) 2026 Vol.30 No.5 pp.1 - 23 Abstract: This study examines the impact of short-term debt on firms' trade credit payables decisions. Using the system generalised method of moments (SGMM) estimator, we test the proposed research framework on a panel dataset of firms listed on the Vietnamese stock exchange over the period 2007-2024. The results reveal a nonlinear, inverted U-shaped relationship between short-term debt and trade credit payables, indicating that trade credit payables are positively associated with short-term debt at low debt levels but negatively associated at high debt levels. This pattern is also confirmed by using a different measure of trade credit payables, an alternative econometric approach, and the subsample to assess the impact of the global financial crisis. These results are consistent with the theoretical predictions of complementarity and substitution effects, suggesting that the complementarity effect dominates at low levels of short-term debt, whereas the substitution effect becomes more pronounced as short-term debt increases. Inderscience Publishers - linking academia, business and industry through research

Title: Short-term financing structure and trade credit dynamics in an emerging market: a nonlinear perspective

Authors: Phan Tran Minh Hung; Thi Kim Nguyen; Nguyen Thanh Phuc; Vo Hoang Diem Trinh

Addresses: Hong Bang International University, 215 Dien Bien Phu Street, Gia Dinh Ward, Ho Chi Minh City, Vietnam ' Excelsia University College, 1 Cityview Road, Pennant Hills, NSW 2120, Australia ' Faculty of Finance and Banking, Van Lang University, 69/68 Dang Thuy Tram Street, Binh Loi Trung Ward, Ho Chi Minh City, Vietnam ' University of Economics, The University of Danang, 71 Ngu Hanh Son Street, Da Nang, Vietnam

Abstract: This study examines the impact of short-term debt on firms' trade credit payables decisions. Using the system generalised method of moments (SGMM) estimator, we test the proposed research framework on a panel dataset of firms listed on the Vietnamese stock exchange over the period 2007-2024. The results reveal a nonlinear, inverted U-shaped relationship between short-term debt and trade credit payables, indicating that trade credit payables are positively associated with short-term debt at low debt levels but negatively associated at high debt levels. This pattern is also confirmed by using a different measure of trade credit payables, an alternative econometric approach, and the subsample to assess the impact of the global financial crisis. These results are consistent with the theoretical predictions of complementarity and substitution effects, suggesting that the complementarity effect dominates at low levels of short-term debt, whereas the substitution effect becomes more pronounced as short-term debt increases.

Keywords: short-term debt; trade credit payables; Vietnamese Stock Exchange; system-generalised method of moments; SGMM.

DOI: 10.1504/IJEBR.2026.153850

International Journal of Economics and Business Research, 2026 Vol.30 No.5, pp.1 - 23

Received: 15 Dec 2025
Accepted: 12 Apr 2026
Published online: 28 May 2026 *

Title: Short-term financing structure and trade credit dynamics in an emerging market: a nonlinear perspective

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