Influence of dynamic capabilities and supply chain finance on supply chain effectiveness in environmental dynamism: a conditional process analysis

Despite the global COVID-19 epidemic, the "domino effect" continues to detrimentally impact business operations, with firms unable to adapt and facing the potential for bankruptcy. Dynamic capabilities (DCs) may help firms overcome challenges in constantly changing operational environments, making financial advantages critical for operations. The existing literature hasn’t yet shown an association between DCs, and economic benefits in the supply chain. Drawing on dynamic capabilities view (DCV), this research examines whether DCs can contribute to financing advantages for manufacturing firms and subsequently enhance supply chain effectiveness (SCE). Dynamic capabilities and supply chain finance (SCF) are difficult to capture variables, so we use online questionnaires to collect data from manufacturing companies in the Yangtze River Delta region and then analyze them through advanced structural equation modeling (SEM). The empirical analysis revealed that DCs can effectively enhance financing advantages, with SCF as the most prominent source of financial aid. The empirical findings demonstrate that both DCs and SCF contribute to SCE to varying degrees, and the environmental dynamism (ED) moderates this relationship, filling gaps in existing studies. Such novel insights provide managers with novel ideas to motivate companies to adopt measures such as digital transformation to improve financial and operational performance in response to a range of supply chain uncertainties, including declining customer demand, resource shortages, rising production costs, and cash flow constraints. The current study explores how DCs can promote financing advantages and SCE under ED, enhancing the understanding of DCs development.