Financing buyer–supplier dyads: an empirical analysis on financial collaboration in the supply chain

Abstract

Awareness of capital commitment in the context of supply management has increased tremendously in recent years. However, researchers often only consider the intra-organisational perspective of financing. Consequently, a great optimisation potential, especially in globally dispersed supply chains, remains unlocked. To address this research gap, this paper presents a conceptual research model with hypotheses derived from principal–agent theory to explain the role of collaboration in the context of financing a buyer–supplier dyad and its effect on the resulting financing performance. A cross-industry survey yielding 145 responses was used to empirically test the hypotheses. The results indicate that both strategy alignment between purchasing and finance departments (intra-firm financial collaboration) as well as in the buyer–supplier dyad (inter-organisational financial collaboration) have a significant positive effect on the overall financing performance. These findings provide researchers and practitioners with a clearer understanding of upstream-oriented supply chain finance and the possibilities and constraints in its implementation.

Keywords:

• supply management
• supply chain finance
• buyer–supplier relationship
• financial collaboration
• principal–agent theory
• multiple win–win situation

Acknowledgements

The authors would like to thank all participating organisations for their support as well as the valuable contributions and insights into the field of SCF. Our special thanks also go to the members of the Supply Chain Finance Community for the fruitful discussions, particularly at the SCFC Forum in Nyenrode in 2013 on current issues of SCF and potential measures for how to solve them. Further, the authors gratefully acknowledge the valuable comments on earlier versions of the paper from the participants of the NOFOMA 2013 Conference in Sweden and the IPSERA 2014 Conference in South Africa.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This study is part of a research project funded by the Swiss Commission for Technology and Innovation (CTI no.13857.2 PFES-ES).