Abstract:Purpose
A growing need for financing in small and medium enterprises (SMEs) has become a significant obstacle to the development of firms. To remove this barrier, the purpose of this paper is to examine how supply chain finance (SCF) assists the firms to improve their performance by utilizing the resource-based view (RBV). Furthermore, the present study also pursues to test the effect of trade digitization as a moderating variable in the relationship between SC finance and the firm performance.
Design/method… Show more
“…Song et al (2016) used structural equation modelling to establish the relationship between network ties and firm credit concern. (Ali et al, 2018) concluded that SCF adoption factors directly and indirectly improve supply chain effectiveness. (Gao and Xing, 2015) proposed that buyers and suppliers always require credit to run their operations effectively and need risk-free financing solutions to meet their funding requirements, otherwise organizational performance will be affected.…”
Purpose
This paper aims to draw on the dynamic capabilities approach and aims to empirically investigate the impact of supply chain finance (SCF) on firm performance (e.g. operational risk and operational performance), the critical effect of environmental dynamism (ED) as moderator and supply chain risk (SCR) and a mediator in the relationship between SCF and organizational performance (OP).
Design/methodology/approach
This study is based on empirical data collected from a survey of 210 companies and their supply chains in mainland China. Structural equation modeling is used to test the proposed relationships.
Findings
The findings show that SCF significantly mitigates the SCR, which subsequently has a significant positive effect on OP (e.g. operational risk and operational performance). The findings also show that when ED is high, the relationship between SCF and SCR is stronger and vice versa. Moreover, SCR mediates the relationship between SCF and OP. The hypothesis regarding the moderating effect of ED on the paths joining SCF and SCR was also supported. SCR has a significant negative effect on OP. However, the hypothesis regarding the effect of ED on SCR was not supported.
Research limitations/implications
This study has some limitations. First, this paper conducted the research with Chinese organizations. This may result in low generalizability in other contexts. In addition, this paper used the survey method and cross-sectional data design in this study, which may generate the potential issue of common method bias. However, the findings of this study will help organizations across China and other emerging economies to adopt SCF as a secure financing mechanism to enhance working capital and mitigate risk. In addition, the paper provides some new managerial insights for decision-makers in organizations, while exploring different factors such as SCF, SCR and ED and their effect on the organization.
Originality/value
This study has greatly developed a general SCF adoption model that helps to guide empirical research investigating the critical impact of SCF on firm performance.
“…Song et al (2016) used structural equation modelling to establish the relationship between network ties and firm credit concern. (Ali et al, 2018) concluded that SCF adoption factors directly and indirectly improve supply chain effectiveness. (Gao and Xing, 2015) proposed that buyers and suppliers always require credit to run their operations effectively and need risk-free financing solutions to meet their funding requirements, otherwise organizational performance will be affected.…”
Purpose
This paper aims to draw on the dynamic capabilities approach and aims to empirically investigate the impact of supply chain finance (SCF) on firm performance (e.g. operational risk and operational performance), the critical effect of environmental dynamism (ED) as moderator and supply chain risk (SCR) and a mediator in the relationship between SCF and organizational performance (OP).
Design/methodology/approach
This study is based on empirical data collected from a survey of 210 companies and their supply chains in mainland China. Structural equation modeling is used to test the proposed relationships.
Findings
The findings show that SCF significantly mitigates the SCR, which subsequently has a significant positive effect on OP (e.g. operational risk and operational performance). The findings also show that when ED is high, the relationship between SCF and SCR is stronger and vice versa. Moreover, SCR mediates the relationship between SCF and OP. The hypothesis regarding the moderating effect of ED on the paths joining SCF and SCR was also supported. SCR has a significant negative effect on OP. However, the hypothesis regarding the effect of ED on SCR was not supported.
Research limitations/implications
This study has some limitations. First, this paper conducted the research with Chinese organizations. This may result in low generalizability in other contexts. In addition, this paper used the survey method and cross-sectional data design in this study, which may generate the potential issue of common method bias. However, the findings of this study will help organizations across China and other emerging economies to adopt SCF as a secure financing mechanism to enhance working capital and mitigate risk. In addition, the paper provides some new managerial insights for decision-makers in organizations, while exploring different factors such as SCF, SCR and ED and their effect on the organization.
Originality/value
This study has greatly developed a general SCF adoption model that helps to guide empirical research investigating the critical impact of SCF on firm performance.
“…They further stated that SMEs typically face a shortage of financing, hence they are encouraged to invest in innovative projects to respond to challenges. Living in a challenging environment and facing numerous constraints, SMEs use supply chain finance to boost their performance (Ali et al, 2018). Pellegrino and Savona (2017) ascertained how financial constraints cause the failure of innovation in business firms.…”
Section: Entrepreneurial Finance and Enterprise Performancementioning
Corporate social responsibility (CSR) has over the past decades transformed from a philanthropic attribute to something compulsory. It has become the imperative duty of organisations, irrespective of their size, nature of business and age. However, because of poor financial capabilities and lack of support, newly established ventures too often fail to voluntarily participate in social and environmental activities. This is one reason why national governments have initiated various programs and policies to encourage CSR and environmental activities in new ventures. However, previous studies have yet to fully reveal the effects of entrepreneurial finance on CSR and the environmental, financial and innovative performance of newly established ventures. To fill this gap, we used a survey to gather empirical evidence from 255 newly established ventures. The results indicate that entrepreneurial finance directly contributes to financial performance, while indirectly contributing to environmental and innovative performance through CSR. Our research recommends that new ventures efficiently utilise entrepreneurial finance to configure CSR activities that achieve high profitability, and environmental and innovative performance. Moreover, our research encourages governments to make financial loans to ventures engaged in social and environmental activities to help them reach their sustainable development goals.
“…The relationship between SCP and firm performance has been extensively discussed in existing literature as it plays a vital role in gaining a competitive advantage and increasing firm productivity (Ali et al , 2018). The concept of supply chain refers to a set of two or more individuals or organizational entities that are directly or indirectly involved in the upstream and downstream flows of goods and services (Mentzer et al , 2001).…”
Section: Theoretical Framework and Hypothesis Developmentmentioning
PurposeThis paper aims to investigate the use of big data (BDU) in predicting technological innovation, supply chain and SMEs' performance and whether technological innovation mediates the association between BDU and firm performance. Additionally, this research also seeks to explore the moderating effect of information sharing in the association between BDU and technological innovation.Design/methodology/approachUsing survey methods and structural associations in AMOS 24.0., the proposed model was tested on SME managers recruited from the largest economic and manufacturing hub of China, Pearl River Delta.FindingsThe findings suggest that BDU is positively related to technological innovation (product and process) and organizational outcomes (e.g., supply chain and SMEs performance). Technological innovation (i.e., product and process) significantly mediates the association between BDU and organizational outcomes. Moreover, information sharing positively moderates the association between BDU and technological innovations.Practical implicationsThis research provides deeper insights into how BDU is useful for SME managers in achieving the firmâs goals. Particularly, SME managers can bring technological innovation into their business processes, overcome the challenges of forecasting, and generate dynamic capabilities for attaining the best SMEsâ performance. Additionally, BDU with information sharing enables SMEs reduce their risk and decrease production costs in their manufacturing process.Originality/valueFirms always need to adopt new ways to enhance their productivity using available resources. This is the first study that contributes to big data and performance management literature by exploring the moderating and mediation mechanism of information sharing and technological innovation respectively using RBVT. The study and research model enhances our insights on BDU, information sharing, and technological innovation as valuable resources for organizations to improve supply chain performance, which subsequently increases SME productivity. This gap was overlooked by previous researchers in the domain of big data.
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