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Significance of supply chain finance: Insights from Saudi Arabia

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The study examines the effect of the supply chain finance (SCF) on the corporate financial performance measured in terms of Return on Assets (ROA), Tobin's Q, and Gross Operating Profit… Click to show full abstract

The study examines the effect of the supply chain finance (SCF) on the corporate financial performance measured in terms of Return on Assets (ROA), Tobin's Q, and Gross Operating Profit (GOP) in the material sector of Saudi Arabia. The study selects a sample of 42 companies from the material sector listed on Tadawul starting in 2008 and ending 2019. A panel regression in terms of pooled OLS, fixed and random effects, and panel GMM is estimated to report the empirical results. The results report a negative and significant effect between the financial performance variables and supply chain finance, specifically with ROA with pooled OLS and fixed and random effects models. The results of panel GMM also show a negative and significant effect between all the financial performance variables and financing supply chain. The results are useful to academicians and the managers in the materials, inventory, and sales sections, and supply chain managers to integrate finance and SCM to achieve corporate benefits.

Keywords: chain finance; supply chain; saudi arabia; finance

Journal Title: Uncertain Supply Chain Management
Year Published: 2021

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