The effects of supply chain finance on organizational performance: a moderated and mediated model
ISSN: 1359-8546
Article publication date: 24 March 2021
Issue publication date: 3 January 2022
Abstract
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.
Keywords
Acknowledgements
This research was supported by the National Natural Science Foundation of China (grant numbers 71731010).
Disclosure statement: No potential conflict of interest was reported by the authors.
Funding: This research was supported by the National Science Foundation of China (nos.71731010).
Citation
Beka Be Nguema, J.-N., Bi, G., Akenroye, T.O. and El Baz, J. (2022), "The effects of supply chain finance on organizational performance: a moderated and mediated model", Supply Chain Management, Vol. 27 No. 1, pp. 113-127. https://doi.org/10.1108/SCM-05-2020-0223
Publisher
:Emerald Publishing Limited
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