The Negative Impact of Supply Chain Finance on Stock Price Synchronicity

Yifei Cheng ()
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Yifei Cheng: Wenzhou-Kean University

A chapter in Proceedings of the 2026 3rd International Conference on Applied Economics, Management Science and Social Development (AEMSS 2026), 2026, pp 105-113 from Springer

Abstract: Abstract We investigate whether supply chain finance (SCF) improves the information environment embedded in stock prices. By employing a multi-dimensional fixed effect approach to analyze data of Chinese A-share companies from 2009 to 2023, this study demonstrates that involvement in SCF exerts a substantial mitigating effect on stock price synchronicity (SYN), suggesting that capital markets incorporate more firm-specific information. Mechanism tests indicate that SCF relaxes financing frictions, increases external monitoring, and improves media sentiment, which jointly strengthens information production. Heterogeneity analyses further show that this value-creation effect is amplified in non-SOEs, large firms, and firms operating in concentrated supply chains. Overall, this study reveals that SCF is not merely a transactional innovation between upstream and downstream enterprises. Instead, it represents a financing and information infrastructure that enhances resource allocation efficiency and market-based governance. Our findings enrich the corporate finance literature by connecting supply chain banking solutions to capital market information content, and highlight that policy support for SCF has both micro-financial and capital-market welfare implications.

Keywords: supply chain finance; stock price synchronicity; information environment; financing constraints; media sentiment (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6239-672-2_11

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DOI: 10.2991/978-94-6239-672-2_11

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