Trade credit policies in the construction industry: A comparative study of Central-Eastern and Western EU countries

Abstract This article aims to investigate the trade credit policies in construction firms across Central-Eastern Europe (CEE) and Western Europe (WE). Utilizing financial data from construction companies in 12 European Union (EU) countries (2000–2020), sourced from the BACH-ESD database, panel data models are applied separately to each region. The analysis compares trade credit granted and obtained, as well as the impact of determinants in WE and CEE countries. The results show limited cross-regional diversity in trade credit policies and determinants, suggesting alignment with common trends and industry standards. This indicates adaptation by construction companies to minimize the impact of regional economic disparities. The study addresses a gap in the corporate short-term finance literature by offering a comprehensive comparative analysis of trade credit practices among construction firms across CEE and WE countries, revealing regional variations that have not been comprehensively explored in previous analyses.