The Impact of Trade Credit on Customer Switching Behaviour: Evidence from the Tanzanian Rice Market

N. Hermes, E. Kihanga, B.W. Lensink, C. Lutz

Research output: Contribution to journalArticleAcademicpeer-review

5 Citations (Scopus)

Abstract

We use primary survey data to analyse the relationship between trade credit and customer switching in the context of trade transactions between wholesalers and retailers in the Tanzanian rice market. Results reveal a negative relation of trade credit and customer switching, that is, trade credit acts as a switching barrier; retailers are reluctant to move to another supplier if they depend on trade credit as a source of external finance. This interpretation fits with the underdeveloped financial markets in Tanzania, in which access to external finance is poor among rice retailers.
Original languageEnglish
Pages (from-to)363-376
JournalJournal of Development Studies
Volume48
Issue number3
DOIs
Publication statusPublished - 2012

Keywords

  • costs
  • determinants
  • satisfaction
  • competition
  • retention
  • services
  • barriers
  • industry

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