Research On The Effect Of Supply Chain Relational Transactions On Financial Flexibility

Recently,as market competition intensifies and the market is immature,the companies are in imperfect competitive markets and the transaction costs between companies are much higher.The barriers of asymmetric information in the market hindered the fair market transactions between companies and their customers,increased the difficulty for companies to looking for new customers in the market.Therefore,the supply chain relational transactions caused by specific investment between companies and customers with a strategic partnership are more and more valued by companies.The traditional competition between companies has evolved into the competition between supply chains.The establishing of relational transactions have an important significance to alleviate competitive pressure,promote technological innovation,sharing information resources and maintain sustainable development trend and so on.However,it is noteworthy that intense competition in the market made some companies rely heavily on key customers,thereby undermine the stability of supply chain relationships and cause many potential risks,such as the occupation of the interests of big customers,loss of major clients will lead to a large number of bad debts and even the risk of rupture of funds and so on.Faced with the importance of the key customer resources and huge risk from the "reliance on large customers",how to coordinate key customer relationships and resist customer concentration risk through appropriate financial means become an important issue of business concerns.So,based on the background of current relational transactions are more general,the paper study on the effects and economic consequences of relational transactions and financial flexibility.This article discussion in eight chapters:Chapter One,introduction.Chapter Two,literature review.Combing and researching on the documents related to financial flexibility and supply chain relational transaction respectively.Chapter Three,theoretical foundation.The main purpose is to combing and explains the theory of supply chain relationships and lays the theoretical foundation for the further study of the relational transactions.Chapter Four,relational transactions and flexible financial saving motive.Proposes the internal mechanism and specific path on how relational transaction affects corporate flexible financial decisions mainly from the action mechanism of relational transaction to enterprises,and then proposed the flexible financial saving motive based on relational transactions.Chapter Five,effect of relational transaction on the economic consequences of the flexible financial decisions.Mainly study the influences of competitive effects and value effects made by relational transaction to flexible financial decisions.Chapter Six,external factors moderating effects of relational transactions and flexible financial decisions.Mainly study the external institutional environment factors,including the nature of property rights?the regulatory role of area institutional environment factors affect on the relationship between relational transactions and flexible financial decisions.Chapter Seven,internal factors moderating effects of relational transactions and flexible financial decisions.Mainly study the regulatory role of corporate governance factors affect on the relationship between relational transactions and flexible financial decisions.Chapter Eight,conclusions and prospects.Mainly summarize the conclusions of this article,make policy recommendations respectively from the enterprise level and government level,and points out the limitations of this study and future research prospects.This paper reached the following conclusions:Firstly,as companies increased levels of relational transaction,On the one hand,corporate reserves financial flexibility is beneficial for customers to implement credible commitment,alleviating the customer concerns about the risk of cooperation,deepening the strategic partnership between the companies.On the other hand,it helps to improve enterprise risk management,preventing potential risks caused by "relying on key customers".Therefore,as companies increased levels of relational transaction,supplier companies will reserve more financial flexibility because of the commitment motivation and precautionary motivation.Furthermore,after identify flexible financial motive based on specific investment characteristics,we found that companies reserve flexible cash is mainly based on the precautionary motive,and reserve flexible debt financing is mainly based on commitment motivation.Secondly,from the perspective of the competitive effects of financial flexibility,companies reserve financial flexibility conducive to the growth of market performance,competitive market effect,has market competitive effects.But as the dependence of enterprises to relational transaction increased,the competitive effect of its financial flexibility will be further weakened.From the perspective of the vale effects of financial flexibility,companies reserve financial flexibility is conducive to enhancing corporate value.However,after further consideration of the impact of relational transaction we found that,only in the enterprises with low-level relational transactions and more flexible financial,flexible financial decisions can bring added value.Thirdly,from the view of adjustment factor of external institutional environment,Non-state-owned enterprises have more strongly motivation to reserve financial flexibility caused by relational transaction compared to state-owned enterprises.But in the area where institutional environment are more comparatively perfect,motivation of reserving financial flexibility due to relational transactions in Non-state-owned enterprises is significantly reduced,but that motivation in state-owned enterprises did not change significantly.From the view of adjustment factor of internal corporate governance,companies with more perfect corporate governance,its positive correlation between relational transactions and flexible financial decisions will be weakened.The main contribution of this paper is:Firstly,this paper provides a new perspective for the study of financial flexibility theory.Based on the industrial organization theory,I study on the effect of relational transaction on financial flexibility decision.This study differs from previous literature that concentrated on the macro environment or micro-enterprise point of view around financial flexibility decisions.It tries to find a new path to solve the financial problems through interdisciplinary research.Enrich the interdisciplinary research of non-financial stakeholders and finance study.Secondly,this paper expands the research ideas of non-financial stakeholders and corporate financial behavior.Previous studies focused on the nature of the customer's capital,while ignoring the nature of their relationship risk.This study combine two qualities,deeply analysis the role of the financial flexibility in decision-making and the mechanism's differences in flexible channels,it expands the research ideas of non-financial stakeholders and corporate financial behavior.Thirdly,this paper enriches the literature of the influence factor of the relational transaction on the economic consequences of financial flexibility decisions.The present study about the economic consequences of the financial strategy from the perspective of relations of the supply chain upstream and downstream is more scarce and ignores the realization condition of the financial behavior's economic consequences.By studying on the mechanism of relational transactions on the financial flexibility's competition and value effect,I find that relational transactions can weaken the financial flexibility's economic effects.It enriches the literature of the influence factor of the relational transaction on the economic consequences of financial flexibility decisions.Lastly,this paper discloses the institutional conditions of the effect of relational transaction on financial flexibility decision.Base on the background of China's transition economic,characterized by "relational society".Deeply analyze institutional environment and corporate governance factors' regulating effects of relational transactions and flexible financial decisions.I find that the development of the institutional environment and corporate governance has an important role to reduce the negative effects of relational transaction.The result helps to disclose above effects of the internal and external institutional conditions.