Supply-Chain Finance: An Empirical Evaluation of Supplier Outcomes

30 Pages Posted: 15 Apr 2024

See all articles by Niklas Amberg

Niklas Amberg

Sveriges Riksbank; Sveriges riksbank; Stockholm School of Economics

Tor Jacobson

Sveriges Riksbank - Research Division

Yingjie Qi

Copenhagen Business School

Date Written: March 29, 2024

Abstract

Buyers and suppliers have diverging interests about trade-credit maturities: buyers desire long payment periods as a source of cheap funding, while suppliers prefer swift payments to avoid locking up scarce liquidity in idle assets. A fast-growing financial product innovation---supply-chain finance (SCF)---offers to resolve these diverging interests, but its net effect on suppliers is a priori unclear. We study the effects of SCF programs on suppliers using unique invoice-level data from a large Swedish bank. We find that SCF programs relax suppliers’ liquidity constraints and thereby enable them to grow their sales, employment, and investments.

Keywords: Trade credit, supply-chain finance, reverse factoring, financial constraints.

JEL Classification: G21, G32, D22.

Suggested Citation

Amberg, Niklas and Jacobson, Tor and Qi, Yingjie, Supply-Chain Finance: An Empirical Evaluation of Supplier Outcomes (March 29, 2024). Available at SSRN: https://ssrn.com/abstract=4777843 or http://dx.doi.org/10.2139/ssrn.4777843

Niklas Amberg

Sveriges Riksbank ( email )

Brunkebergstorg 11
SE-103 37 Stockholm
Sweden

Sveriges riksbank ( email )

S-103 37 Stockholm
Sweden

Stockholm School of Economics ( email )

PO Box 6501
Stockholm, 11383
Sweden

Tor Jacobson

Sveriges Riksbank - Research Division ( email )

S-103 37 Stockholm
Sweden
+46 8 787 0000 (Phone)

HOME PAGE: www.riksbank.com

Yingjie Qi (Contact Author)

Copenhagen Business School ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

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