The Impact of Product Market Share on the Relationship between Brand Capital and Trade Credit of Companies

Document Type : Research Paper

Authors

1 MSc., Department of Accounting, Faculty of Accounting, Azhvaz Branch, Islamic Azad University, Ahvaz, Iran.

2 Assistant Prof., Department of Accounting, Faculty of Accounting, Azhvaz Branch, Islamic Azad University, Ahvaz, Iran.

3 Instructor, Department of Accounting, Faculty of Accounting, Payame Noor University, Ramhormoz, Iran.

Abstract

Objective
Brand capital is a key aspect of strategic and operational marketing management, attracting considerable attention from researchers in recent years. It reflects the impact of marketing and advertising efforts and can enhance a company’s credibility with suppliers by strengthening its overall reputation. Likewise, a product’s market share plays a critical role in increasing company revenue by boosting sales within a specific industry, thereby reducing creditors’ risk regarding the company’s ability to meet its obligations. Therefore, the current research has been conducted with the general aim of investigating the effect of product market share on the relationship between brand capital and the trade credit of companies in the stock market of Iran.
 
Methodology
The present research employs a two-part methodology. In the theoretical foundations and literature review section, a library-based approach was used to collect information. In the empirical part, data for testing the research hypotheses were collected from 150 companies listed on the Iranian stock market over seven years, spanning the fiscal years 2014 to 2020. For the statistical analysis of the research data, Oviz software version 9 was used. In order to test the hypotheses of the multivariable regression model, it was done with the combined data method. To select the appropriate model for hypothesis testing, the Chow test and panel data methods were employed. Additionally, the Hausman test was conducted to determine whether fixed or random effects were more suitable, with the results supporting the use of the random effects model.
 
Findings
The results of the research hypothesis test show that in the stock market of Iran, brand capital has a significant positive effect on the trade credit of companies. Also, the findings of the research showed that the market share of the product has a significant positive effect on the trade credit of the companies. In addition, that product market share has a significant increasing effect on the relationship between brand capital and the trade credit of companies.
 
Conclusion
Research evidence indicates that increasing brand capital enhances a company's reputation, product quality, and overall credibility, which in turn boosts sales to customers. Consequently, higher brand capital reduces the company's credit risk by increasing operating income, leading suppliers to extend greater trade credit to the company. Also, product market share means more sales of the company to its customers in a specific industry. Increasing sales to customers requires more raw materials, which benefits suppliers economically by increasing their sales to the company. As a result, suppliers are more willing to extend trade credit. Furthermore, higher brand equity can boost the company’s product market share by driving sales, which in turn leads to greater trade credit from suppliers.
 

Keywords

Main Subjects

References

 
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Journal of Business Management
Volume 17, Issue 4
2025
Pages 1003-1027

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