Price Discrimination as a Factor that Affect Trade Credit among Manufacturing Firms of Uganda


Authors : Joseph B. Yiga Lubega, Benon C. Basheka

Volume/Issue : Volume 4 - 2019, Issue 7 - July

Google Scholar : https://goo.gl/DF9R4u

Scribd : https://bit.ly/2KyeCVN

Abstract : This article is an analysis of price discrimination as a factor that affect Trade credit among manufacturing firms of Uganda. The study also thought to address repayment behavior as a knowledge gap which other studies on trade credit practices from price discrimination and transaction cost theories have not addressed. This study sought to establish whether price discrimination affect trade credit practices and examine whether repayment behavior mediates this relationship among manufacturing firms of Uganda. The study took a correlational cross sectional survey approach and employed both qualitative and quantitative approaches. A sample size was 78 respondents out of a population of 31 firms with three respondents each and with data analysed using SPSS version 20. Validity and reability of the instruments were both ensured. Results from the study indicate that price discrimination representing independent variable was a positive predictor of trade credit while repayment behavior (mediator) was not a significant predictor. The limitations faced included the fact that a few respondents did not have full knowledge of what was involved and some thought they were revealing too much information about the firm. My contribution to the world is a confirmation that firms should seriously consider repayment behavior before granting trade credit to customers and that price discrimination is positively associated to trade credit.

Keywords : Manufacturing Firms, Trade Credit, Price Discrimination, Firm Market Power, Customer Demand, Repayment Behavior, Uganda.

This article is an analysis of price discrimination as a factor that affect Trade credit among manufacturing firms of Uganda. The study also thought to address repayment behavior as a knowledge gap which other studies on trade credit practices from price discrimination and transaction cost theories have not addressed. This study sought to establish whether price discrimination affect trade credit practices and examine whether repayment behavior mediates this relationship among manufacturing firms of Uganda. The study took a correlational cross sectional survey approach and employed both qualitative and quantitative approaches. A sample size was 78 respondents out of a population of 31 firms with three respondents each and with data analysed using SPSS version 20. Validity and reability of the instruments were both ensured. Results from the study indicate that price discrimination representing independent variable was a positive predictor of trade credit while repayment behavior (mediator) was not a significant predictor. The limitations faced included the fact that a few respondents did not have full knowledge of what was involved and some thought they were revealing too much information about the firm. My contribution to the world is a confirmation that firms should seriously consider repayment behavior before granting trade credit to customers and that price discrimination is positively associated to trade credit.

Keywords : Manufacturing Firms, Trade Credit, Price Discrimination, Firm Market Power, Customer Demand, Repayment Behavior, Uganda.

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