Determinants of supply chain finance adoption among SMEs: evidence from a developing economy

Edward Nartey

Meditari Accountancy Research, 2023, vol. 32, issue 3, 1006-1030

Abstract: Purpose - Little is known about the determinants of supply chain finance (SCF) adoption among small and medium-sized enterprises (SMEs) in developing countries. This study aims to address this relevant research gap and hence, draws on the resource-based view and transaction cost economies to empirically investigate five factors that make SCF adoption practicable among SMEs in Ghana. Design/methodology/approach - The approach involves a sample of 257 SME managers/owners and modelling via structural equations modelling. Findings - All five factors (innovative capability, information sharing, inter- and intra-firm collaboration, external financing and trade process digitization) were found to impact positively and significantly on SCF adoption. The findings provide SME managers/owners with a research model which guides them on how to settle the SCF process. Research limitations/implications - This paper used a cross-sectional survey, which makes it impossible to access changes over time. In addition, the use of quantitative method limits respondents from expressing their feelings fully. Using a mixed or qualitative methodology will provide avenues for future research. Practical implications - This paper offers a completive advantage for Ghanaian SMEs to strengthen their relationships while collaborating with each other. The findings suggest that by adopting SCF solutions, SMEs can optimize their liquidity and working capital. The factors underpinning SCF adoption are of incredible attractiveness for SME managers/owners to discover the relevant practice of SCF solutions. SMEs should adopt SCF strategies for improving their capability to respond promptly to transactions. Originality/value - This paper is among the few papers that have examined these five factors in a developing economy context. The study also provides new understanding of the factors that influence SCF adoption in the context of a developing economy.

Keywords: Supply chain finance adoption; Innovative capability; Trade process digitization; Information sharing; Intra- and inter-firm collaboration; External financing (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:medarp:medar-12-2022-1874

DOI: 10.1108/MEDAR-12-2022-1874

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