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Supply Chain Finance Arrangements and Shareholder Benefits

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  • Leiza Nochebuena-Evans

Abstract

Supply chain finance (SCF) is a buyer-led financial innovation used to optimize working capital and increase liquidity within the supply chain. Advertised as win-win, little is known of the benefits to firms or shareholders. I explore whether these arrangements are beneficial to the initiating firm and whether such benefits percolate to the buyer’s investors. I find that although a firm’s days payable outstanding increases post-adoption, SCF arrangements are not beneficial to all firms. Liquidity and profitability decrease post-adoption. I also find that shareholders respond negatively to SCF adoptions, but this response may be attenuated by some firms increasing share repurchases.

Suggested Citation

  • Leiza Nochebuena-Evans, 2023. "Supply Chain Finance Arrangements and Shareholder Benefits," The International Trade Journal, Taylor & Francis Journals, vol. 37(1), pages 47-69, January.
    • Handle: RePEc:taf:uitjxx:v:37:y:2023:i:1:p:47-69
    DOI: 10.1080/08853908.2022.2140230
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    Cited by:

    1. Yixin Dou & Jiaxin Zhao, 2024. "The Impact of Supply Chain Finance on the Investment Efficiency of Publicly Listed Companies in China Based on Sustainable Development," Sustainability, MDPI, vol. 16(18), pages 1-19, September.

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