Drivers and Outcomes of Supply Chain Finance Adoption: An Empirical Investigation in China

ABSTRACT This study develops a supply chain finance adoption model to investigate the key drivers and corresponding outcomes of supply chain finance adoption decisions. We examine the impacts of perceived capital pressure, order fulfillment cycle, and inventory turnover cycle on three types of supply chain finance adoption (accounts receivable finance, inventory finance, accounts payable finance). In addition, we examine the impacts of three types supply chain finance adoption on the performance of supply chain cost reduction. We use data collected from 683 companies of eight industries in China to test our proposed relationships. The results show that perceived capital pressure and order fulfillment cycle are significant predictors of supply chain finance adoption decisions. Accounts receivable finance and inventory finance significantly influence supply chain cost reduction. This study is one of the first attempts to conduct large sample empirical investigation in supply chain finance research. Our findings enhance the understanding of supply chain finance adoption for both academics and practitioners.