Ethics in trade credit: virtues and initiatives

Christopher Cowton, Leire San-Jose

Research output: Contribution to journalArticle

Abstract

Business ethics is growing in importance in both academic writing and in
corporate policy and practice. Yet, in spite of the importance of finance as a
component of business relatively little has been written about ethics in
finance. In particular trade credit has not been subjected to ethical analysis.
This paper develops an analysis of the ethics of trade credit through a focus
on payment «virtues». Payment virtue in organizations should include not
only prompt payment, but also quick payment. However, speed (slowness) of
payment, as measured by the number of days’ credit taken, is a misleading
indicator of the commendableness of a firm’s behaviour because of differences
in the supply chain characteristics of different industries. The other novel
aspect of our analysis is to go beyond a focus on the buying firm to introduce
into the picture the responsibilities of the firm supplying the goods or services
and credit. It is a financial problem with an ethical component in which we
emphasize the operational aspects of trade credit. Some countries, such as UK
have introduced some initiatives to encourage better payment behaviour by
companies. The possibility of implementing similar initiatives in Spain is
considered
Translated title of the contributionEthics in trade credit: virtues and initiatives
LanguageSpanish
Pages93-110
JournalGogoa
Volume9
Issue number1
Publication statusPublished - Apr 2009

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Trade credit
Payment
Credit
Industry
Supply chain
Responsibility
Finance
Business ethics
Spain

Cite this

Cowton, Christopher ; San-Jose, Leire. / Etika merkataritza kredituan : bertuteak eta ekimenak. In: Gogoa. 2009 ; Vol. 9, No. 1. pp. 93-110.
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Cowton, C & San-Jose, L 2009, 'Etika merkataritza kredituan: bertuteak eta ekimenak', Gogoa, vol. 9, no. 1, pp. 93-110.

Etika merkataritza kredituan : bertuteak eta ekimenak. / Cowton, Christopher; San-Jose, Leire.

In: Gogoa, Vol. 9, No. 1, 04.2009, p. 93-110.

Research output: Contribution to journalArticle

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