The Impact Of Information Processing Capability And Supply Chain Integration On Decision Making In Supply Chain Financing

In the context of the emerging modes of supply chain financing(SCF)service platforms,this research attempts to explore the impact of information-processing capability(IPC)and supply chain integration on the decision making in the management of SCF risk and coordination costs based on exploratory multiple case studies and another single case study respectively,and investigate the impact of supply chain integration on the decision making in the amount of SCF by analyzing 214 SCF project secondary data and 34 questionnaire data collected from SCF service platform.The research findings are summarized as follows.Firstly,the platform enterprises(including,financial institutions,core firms and third-party platform enterprises)can reduce pre-loan SCF risk by selecting transaction counterparties with profitable transactions,strong business capabilities and long-term stable collaborative relationships through “identification of good transaction structures” and can reduce post-loan SCF risk by controlling the recycling of SCF funds through “controlling of trade closed loops”.The platform enterprises with stronger “routine-reciprocal” IPC,the ability of obtaining authentic,comprehensive,consistent transaction data and using the data in decision-making processes facilitated by information technology,can implement identification of good transaction structures and controlling of trade closed loops at a more advanced level with lower costs,subsequently reduce the SCF risk and coordination costs at the same time.Secondly,the third-party platform enterprises can establish the routine-reciprocal IPC through the following two dimensions of supply chain integration: business process integration(BPI)and information system integration(ISI).The third-party platform enterprises can implement identification of good transaction structures and controlling of trade closed loops effectively through BPI and ISI,subsequently reduce SCF risk indirectly.In addition,the third-party platform enterprises can lower the SCF risk directly through BPI and ISI by reducing the uncertainty of supply chain transaction.Thirdly,platform customers can reduce the amount of SCF used in commercial projects of innovative products through BPI in which they can speed up the turnover of working capital,increase the effectiveness in the utilization of their own cash and then reduce the needs and dependency of external finance.Meanwhile,the platform customers can increase the amount of SCF used in the projects through ISI in which they can reduce the information asymmetry between themselves and the platform enterprise,reduce the perceived SCF risk of the platform enterprise and then increase the probability of applying for larger amount of SCF successfully.In addition,there is a significant positive correlation between the amount of SCF used in projects and the cash-on-cash return of the projects.This research has important theoretical and practical value.This research develops the model of SCF risk and coordination cost management through the lens of three theories,credit rationing theory,transaction cost economics and information-processing theory,lays an important foundation for future SCF research by proposing both the structures and measurement items,extends the connotations and scopes of the three theories above,and strengthens the credit rationing theory and the information-processing theory.This research offers a systematic solution to the platform enterprises to reduce the SCF risk and coordination costs simultaneously;can provide valuable guideline to the third-party platform enterprises to establish the capabilities of SCF risk and coordination cost management so as to improve the SCF service system;suggests valuable practical guidelines to platform enterprises and customers in making SCF decisions.