The relationship between supply chain finance and firm performance: Evidence from Thai listed firms

Abstract

The idea of supply chain finance (SCF), often called "working capital management", is to optimize the flow of funds across the entire supply chain in businesses, theoretically enhancing supply chain participants' efficiency. This study aims to investigate if the relationship between supply chain finance and firm performance is consistent across industry sectors. The sample includes businesses that were listed on the Stock Exchange of Thailand (SET) between 2016 and 2020. The study compared 64 firms in the agro-industry with 668 firms from all SET industries. The annual financial report (Form 56-1) and data from the SETSMART database were mined for source data. Though the multiple regression study found a substantial positive relationship between SCF and firm performance for the agro-industry, it was not consistent across all other industries. The results revealed a significant positive relationship between SCF and firm performance. This research thus assists in understanding how companies listed on the SET manage their financial supply chains. The listed companies may apply the findings to improve their performance through effective working capital management. In addition, governmental agencies can use the results to develop policies that support effective financial supply chain management for all supply chain participants.