Supply chain finance, firm performance and industry competition: empirical evidence from Pakistan

Abstract

PurposeThis study empirically tests the relationship between supply chain finance (SCF) and firm performance. Moreover, this study also investigates the potential role of industry competition in the proposed relationship between SCF and firm performance.Design/methodology/approachA conceptual framework is developed and tested using secondary data collected from 122 non-financial listed firms on the Pakistan Stock Exchange (PSX) for the period of ten years (2012–2021). Ordinary least squares (OLS) regression analysis is performed in STATA to validate the proposed relationships.FindingsThe results highlight that SCF has a positive impact on firm performance. Moreover, industry competition positively moderates the relationship between SCF and firm performance.Practical implicationsThis study would help firms in assessing the value of operational financing to their financially constrained suppliers/customers by adopting supply chain finance practices. Furthermore, this study will help understand the role of the competitive environment in supply chain finance decision-making.Originality/valueThe findings will help core firms better understand how implementing SCF benefits firm performance under high product competition, especially in emerging markets.