Empirical Study On How Supply Chain Finance Influences Small And Medium Enterprises Performance

Small and medium enterprises play an important role in the socio-economic development of the nations.Technological development has changed the way of doing business,and it is essential for small and medium enterprises to advance themselves to compete in the market to obtain superior performance.Due to globalization,textile small&medium enterprises(SMEs)operations have become complex which raised the needs of risk-free financing solutions to support the SMEs daily processes.Small and medium enterprises always face the shortages of credit which is considered as a significant hurdle to their development and growth.In such situations,the firm cannot perform their operational tasks efficiently and effectively.Specifically,lenders,financial institutions and financial services providers preferred to grant credits to large firms as compared to small and medium firms.One of the significant reason for this is that small and medium enterprises have limited operating history,no previous financial records,and small ventures.Recently,a new wave of innovative financing has emerged in the business environment to facilitate the small and medium enterprise by sanctioning credits on the basis of their creditworthiness(high credit scores).Therefore,in order to support the buyers and suppliers financial trading mechanism that how they can obtain risk-free credits to improve SC effectiveness and firm performance,the primary goal(motive)of this dissertation is to investigate the effect of supply chain finance,a risk-free financing solution,on supply chain effectiveness in the context of textile SMEs by employing transaction cost approach.Moreover,this research pursues to identify the success factors of SC finance and how they help the entrepreneurs of small and medium enterprises to adopt SC finance.Furthermore,a growing need for financing in SMEs has become a significant obstacle to the development of firms.To remove this barrier,this dissertation is to examine how supply chain finance(SCF)assists the firms to improve their performance by utilizing the resource-based view(RBV).The present dissertation moreover also pursues to test the effect of trade digitization as a moderating variable in the relationship between SC finance and the firm performance.Participants of the study were recruited from textile SMEs through a structured questionnaire.The proposed model and structural relationships were assessed by employing AMOS 24.0,hierarchical linear regression model in SPSS 23.0,and artificial neural network in SPSS 23.0.My dissertation is summarized as follows;Introduction Chapter 1 presents supply chain finance background,it’s importance for small and medium enterprises,literature review,the motivation of my dissertation,the theoretical framework of my dissertation,dissertation contributions and structure of my dissertation.Theory and hypotheses development Chapter 2 presents the theoretical background of my dissertation theoretical framework and discusses the structural relationships between supply chain finance and small and medium enterprises.Research Methodology Chapter 3 presents the information about sample and procedures,instruments of the study,analytical techniques to validate the proposed model and relationships.The results of study Chapter 4 presents the sample characteristics,descriptive statistics,correlations findings,measurement tests,measurement model and structural model and the findings of hypotheses testings.Discussion Chapter 5 provides the conclusions,theoretical and practical contributions of my dissertation and offers limitations and future research directions.From the perspective of small and medium enterprises,my dissertation empirically investigates the influence of SC finance on small and medium enterprises performance and finds some conclusions,main summarized below.First,negotiation and collaboration in supply chain(SC)network is vital to adopt the financing solutions such as SC finance to meet small and medium enterprises daily financial needs.Moreover,it was found that SC finance significantly increases the working capital and mitigate the risk of default which subsequently enhances SC effectiveness.Second,my dissertation findings extend transaction cost theory by establishing an integrated empirical model of SC finance and firm performance that success factors of SC finance significantly mitigate the cost of obtaining risk-free financing solution(SC finance)to bring SC effectiveness.Moreover,my study expands the resource-based view that SC finance is a significant financial resource which directly improves the firm performance.Third,trade digitization plays an important part to strengthen the supply chain network.Digitalization of supply chain supports all members of the supply chain while providing an online mechanism of visibility of supply chain orders,suppliers receipts,information sharing and offers a bird view of the product,information,and financial flows.As the current study significantly describes the firm resource-based view through SC finance and trade digitization to predict the SMEs performance.Fourth,small and medium enterprises entrepreneurs adopt a secure financing scheme to reduce the credit transaction costs,optimize the firm working capital,reduce the risk of default,and improve supply chain effectiveness.Small and medium enterprises and suppliers can build strong relationships while adopting the findings of this study.Small and medium enterprises can engage the suppliers to work under strategic alliance through negotiation,collaboration,and work digitization,and to extend their payment terms while providing an opportunity to the suppliers to get their payment back before a fixed time through discounting from financial institutions as needed.