Improving assessment capability for accounts receivable pool financiers: An empirical investigation
Industrial Management & Data Systems
ISSN: 0263-5577
Article publication date: 15 January 2020
Issue publication date: 22 March 2020
Abstract
Purpose
The accounts receivable pool (ARP) is an e-invoice management system that provides suppliers with easy access to financial service. The purpose of this paper is to focus on the strength and weakness of ARP mechanism and suggest efficient methods to identify creditworthy borrowers.
Design/methodology/approach
By decomposing the sales records of 348 ARP borrowers and predicting the occurrence of overdue incidences, this study first portrays the creditworthy borrowers by sales features. Then, content analysis was applied to measure the loadings of soft and hard information, and examined the effectiveness of different information structures in creditworthiness assessment.
Findings
For ARP borrowers, upward trend and low volatility reveal their creditworthiness. In order to identify creditworthy borrowers beforehand, ARP financiers who have elaborated more soft information and less hard information can perform better.
Originality/value
This study first discussed ARP finance from a critical perspective and underlines borrower assessment to eliminate the defect of loose recourse. The empirical evidence presents the sales features of creditworthy borrowers. Moreover, the results suggest an efficient approach for ARP financiers to conduct better assessment.
Keywords
Acknowledgements
This research is financial supported by a Major International (Regional) Joint Research Project (71420107024) of the Natural Science Foundation of China (NSFC), Key Program Special Fund in XJTLU (Nos KSF-A-13 and KSF-A-06). In addition, the authors thank the anonymous referees, Tianhe Tian for valuable suggestions on an earlier version of this paper, and participants in the International Conference on Operations and Supply Chain Management for helpful discussion.
Citation
Song, X., Ying, H., Zhao, X. and Chen, L. (2020), "Improving assessment capability for accounts receivable pool financiers: An empirical investigation", Industrial Management & Data Systems, Vol. 120 No. 3, pp. 547-566. https://doi.org/10.1108/IMDS-04-2019-0239
Publisher
:Emerald Publishing Limited
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