“Spaniards tend to prefer to conduct transactional business, whereby as soon as they have received full payment for the goods or services supplied, they immediately conclude their relationship with their customer.”
100% agree to the above statement. I will go further than that in the case of Construction Industry its is as soon as you have put the 20 or 30% to exchange the contract the developers do not want to know. This practise is applied all over the Mediterranean world.
Personally, I put it down to a number of factors.
1) Local business lack of confidence in the economy and the system.
2) They never felt that once you have borrowed, you will have the capacity to come for more.
3) All commercial transactions were taken as a short term, as there were no sensible mid long term financial instruments. Letras were the only practical and short term finance available. The associated cost of borrowing i.e. notary fee etc would discourage people.
4) Lack of confidence in your product and the raw material used/supplied. The supplier agreeing to its price and delivery time.
5) In the past Bank interest rates were so high that you had to charge a very large margin/price that your local economy could not support it. The product became uncompetitive, that they felt no one will come back for more as a buyer you would be so frustrated, jaded and perhaps lost money on it.
6)Civil service, its working practises, non accountabilty and its petty attitude, delayed transactions.
7) Making, money was considered and still considered as Vulgar. It was socially looked down upon. So most transaction were done to put dinner on the table as appose to wealth creation.
8) Punitive direct or indirect taxes. The attitude of the Tax man was if you have the money to start a business than I want it now and you are some capitalist, who is sucking the blood of the poor people, and you pay.
I think the above are enough