Supply chain finance, financial development and profitability of real estate firms in Vietnam

Abstract

This paper investigates the impact of supply chain finance (SCF) and financial development on profitability of real estate firms in Vietnam over the 2013-2017 period. This is the first empirical research examining the impact of financial development on firm profitability. By employing GMM (generalized method of moment), this paper reveals the important role of supply chain finance (SCF) and financial development in profitability of real estate firms. Specifically, firm profitability (P) is influenced negatively by cash conversion cycle (CCC) and positively by financial development (FD). In addition, profitability is negatively correlated with control variable of financial leverage (LEV) and positively associated with control variable of firm size (SIZE). The findings reveal the role of supply chain finance and financial development in firm profitability which policymakers as well as managers at real estate firms can apply suitable methods in order to improve firms' profits. .

Nonlinear impact of supply chain finance on the performance of seafood firms: A case study from Vietnam

“…Then, regression analysis is performed to address potential endogeneity, heteroskedasticity, and autocorrelation issues. Following that, Generalized Method of Moment (GMM) is adopted to repair problems in regression-based hypotheses (if any) and potential endogeneity (Bui, 2020b;Doan, 2020a;Doan, 2020b). Specially for nonlinear impact model, the GMM is superior to other models (Bui, 2020a).…”

“…The performance of supply chain finance is usually measured by indicator of cash conversion cycle (Zhang et al, 2019), which is defined as the period starting from the cash outlay to cash recovery (Zhang et al, 2019;Bui, 2020b). According to Wuttke et al (2013), the decrease in cash conversion cycle makes firms speed up the cash conversion by a lower cost of capital.…”

“…It can be stated that supply chain finance plays a vital role in the optimization of financial flows (Pfohl & Gomm, 2009), and working capital (Liebl et al, 2016); the stabilization of the entire supply chain (Klapper, 2006); and more particularly the increase in firm performance (Raghavan & Mishra, 2011;Lekkakos & Serrano, 2016). Although supply chain finance has been analysed more since the beginning of twenty-first century (Pfohl & Gomm, 2009), especially after the global financial crisis (Polak et al, 2012), the impact of supply chain finance on firm performance is only examined by few researchers, namely Zhang et al (2019) and Bui (2020b) who intriguingly reveal their positive correlation. In other words, a short cash conversion cycle stimulates the supply chain participants to perform more effectively.…”

“…In other words, a short cash conversion cycle stimulates the supply chain participants to perform more effectively. Further, the performance is also influenced by some control variables of firm-specific and macroeconomic factors such as capital structure (Azhagaiah & Gavoury, 2011;Malik, 2011;Akinlo & Asaolu, 2012;González, 2013;Chechet & Olayiwola, 2014;Vithessonthi & Tongurai, 2015;Daud et al, 2016;Ameen & Shahzadi, 2017;Ghayas & Akhter, 2018;Bui, 2020b), firm size (Malik, 2011;Akinlo & Asaolu, 2012;Vithessonthi & Tongurai, 2015;Daud et al, 2016;Bui, 2020b), and economic growth (Vithessonthi & Tongurai, 2015). Accordingly, a healthy economy and large size of the participants facilitate the improvement of their performance.…”

“…Despite its importance in boosting how the firm performs, this topic has not been common in empirical research. Only few scholars, namely, Zhang et al (2019) and Bui (2020b) have investigated the impact of supply chain finance on firm performance. Interestingly, all these studies report that supply chain finance helps raise the performance of its participants.…”