The Study On Decision Of The Bank Credit On Supply Chain Finance Background

Many vendors have less market power than the focal firm. Thus, they usually sold theirproduct in open account to keep long-term relationship with the focal firm, namely, theysupplied working capital for the supply chain. So they need finance form banks or otherfinance institutions. At the same time, they are always SMEs, which are start-up firms, andlack of capital accumulation. They cannot put enough collateral, which is hard information toget banking, to bank to get loan. In the meantime, they are lack of good reputations, which aresoft information for bank to supply credit for them. Thus, finance becomes the bottleneck ofthe vendor’s development. Not only the vendors cannot further expand production, but alsoaffect the stability and competitiveness of the supply chain. They remain SMEs, and supplyworking capital for the supply chain. In other words, these vendors fall into a vicious cycle ofcredit: supply working capital-no cash-no collateral-not loans-not develop–small firms-supply working capital…, etc. The research about financial innovation to finance the vendors,which are at the established information constraints and asset constraints, is an interestingtopic for bank to ensure their earnings, for SMEs to get loans to help their furtherdevelopment, and for keeping supply chain stability and competitiveness.Though now there are a lot of literature the supply chain finance, there are five aspectstopics worthy of studying:First, how to model the bank credit behavior for vendors based on supply chainbackground?Second, how to build theoretical model which study the relation between the supplychain characteristics (such as focal firm Capacity, vendor’s capacity and supply chaingovernance) and bank credit for vendor? We will study it in what way?Third, on the basis of the theoretical model, the need to further demonstrate relationshipbetween the focal firm Capacity, vendors capacity and supply chain governance and the bankcredit level for vendors, if the relationship cannot be observed directly, but which is amediator variable that can be inferred from bank credit condition (such as transparency) and ultimate behavioral outcomes (including credit lines, time and trust). Is this variable the bankcognition about vendor?Fourth, whether the model that the focal firm involved in the vendor’s financing is amoderator variable? How does the model that the focal firm involved in the vendor’sfinancing adjust the strength of the relationship between banks cognition about vendors withthe focal firm capacity, vendor’s capacity and supply chain governance level, etc.? How themodels that the focal firm involved in the vendor’s financing adjust the strength of therelationship between banks cognition about vendors with the level of bank credit? How themodel that the focal firm involved in the vendor’s financing adjust the strength of therelationship between the focal firm capacity, the strength of the relationship between vendorsand supply chain governance capacity with the level of vendor’s credit?Fifth, whether the banking mode, including the requirements of bank about informationwhich is from soft to hard, that is, from hard to easy to get loan, is a moderator? How does itadjust the strength of the relationship between banks cognitions about vendor’s credit line,credit time and credit strict condition?The paper analyzes the banks behavior under different conditions and credit constraints,by constructing a banking game model to. After questionnaire design and data collection, weanalyzed each variable’s distinguish validity, convergent validity, exploratory factor analysisand reliability analysis, which determines rationality of the design of the questionnaire. Next,the paper calculated the mean, standard deviation and correlation coefficients of each variable,which determine the initial focal firm capacity, supply chain governance level, vendor’scapacity. The paper verified assumptions that relationship between the bank cognition aboutvendors with vendor’s credit line, credit time and credit strict condition.We can get five conclusions from the paper:(1) The focal firm capacity, indirectly through banks cognition about vendors, has asignificant positive impact on vendor’s credit line, credit time and credit strict condition ofbank. The supply chain governance level, indirectly through banks cognition about vendors,has a significant positive impact on vendor’s credit line, credit time and credit strict condition.The vendor’s capacity, indirectly through banks cognition about vendors, has a significantpositive impact on vendor’s credit line, credit time and credit strict condition. (2) The model that the focal firm involved in the vendor’s financing, through bankcognition about vendors, have an indirect significant positive impact on vendor’s credit line,credit time and credit strict condition.(3) The model that the focal firm involved in the vendor’s financing, strengthen thepositive influence from to the focal firm capacity to bank cognition about vendors, and thusstrengthen the focal firm capacity’s positive influence on vendor’s credit line, credit time andcredit strict condition.(4) Bank cognition about vendors has a significant positive impact on vendor’s creditline, credit time and credit strict condition.(5) Banking mode, through bank cognition about vendors, has a significant positiveindirect impact on vendor’s credit line, credit time and credit strict condition.