Trade Credit and Corporate Social Responsibility: A Literature Review

The existing literature on trade credit and corporate social responsibility (CSR) is extensive. Despite the rich discourse on the above topics, there is a lack of studies that synthesize the existing body of work on the relationship between using trade credit – as its provider and recipient – and firms’ CSR. The present article aims to address this gap by pursuing a dual objective. First, it seeks to answer the following research question: What is the relationship between firms’ CSR and their use of trade credit? Secondly, it aims to identify possible avenues for future research in a given area. This review indicates that vast studies investigating the above issue have found a positive impact of firms’ CSR performance on trade credit use – both its receiving and providing. Regarding trade credit-CSR linkage, the study highlights the need for a more in-depth examination of late or non-payment phenomena, a more detailed exploration of suppliers’ perceptions of buyers’ CSR performance, and an extension of the geographical scope of the analysis.