Antecedents of payment discipline
DOI:
https://doi.org/10.37886/Keywords:
payment discipline, payment defaults, antecedents at the enterprise level, antecedents at the branch level, management ethics, Slovenian companiesAbstract
Research Question (RQ): Do antecedents at the enterprise and branch levels affect the payment discipline in Slovenian enterprises with 10 or more employees?
Purpose: Payment discipline is influenced by various antecedents. In our study, we focused on the antecedents at the enterprise level and at the branch level. The purpose of the study was to determine whether these antecedents affect the payment discipline of companies.
Method: The construct of management ethics was measured with Corporate Ethical Virtues measurement instrument (Kaptein, 2008). The sample comprises 273 Slovenian enterprises with 10 or more employees, which represented 9.1% of all enterprises invited to take part in the survey. The values of individual financial ratios for these enterprises were calculated. Data for the calculation were obtained from the Agency of the Republic of Slovenia for Public Legal Records and Related Services (AJPES) and the public JOLP base (publication of annual reports).
Results: Significant positive relationships were observed between debt-to-assets ratio and average late payment time, the freezing of the company’s transaction account and the average late payment time, the share of companies with frozen accounts in the industry and the average late payment time. A significant negative relationship was observed between gross return on assets and average late payment time.
Organization: The results of the research provide useful information for organizations about what they should pay attention to prior to entering into transactions with other organizations in order to avoid administrative and financial burden due to late payments.
Society: This study lays the foundation for further in-depth research in the field of payment discipline and its causes, and it represents basic starting points for further research in other related social areas.
Originality: This study represents an important contribution to understanding the causes of payment defaults. The study also includes non-financial antecedents of payment discipline, which represents a new, important contribution of the research in the validation of the Corporate Ethical Virtues measurement instrument and the validation of ethical culture as a multidimensional construct.
Limitations/Future Research: Limitations of the research are: (1) geographic limitation (sample of Slovenia enterprises), (2) in the part in which we conducted a questionnaire, we interviewed only one person, and (3) we assumed that we obtained answers showing the actual state of culture in companies. Taking into consideration that there are considerable differences in payment discipline throughout Europe, any research on comparisons between the impacts of ethical management and the impact of national culture in different countries with varying levels of payments discipline would be welcome.
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