Bridging Financial and Operational Gaps in Supply Chain Finance: An Information Processing Theory Perspective

D. Divya, Rebecca Abraham (), Venkata Mrudula Bhimavarapu and O. N. Arunkumar
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D. Divya: School of Business and Management, Christ University, Bengaluru 560029, Karnataka, India
Rebecca Abraham: Huizenga College of Business, Nova Southeastern University, 3301 College Ave, Fort Lauderdale, FL 33314, USA
Venkata Mrudula Bhimavarapu: Symbiosis Institute of Business Management, Symbiosis International (Deemed University), Bengaluru 560100, Karnataka, India
O. N. Arunkumar: Symbiosis Institute of Business Management, Symbiosis International (Deemed University), Bengaluru 560100, Karnataka, India

JRFM, 2025, vol. 18, issue 9, 1-19

Abstract: This paper explores the integration of financial and operational flows in Supply Chain Finance (SCF) through the lens of Information Processing Theory (IPT). Despite increasing adoption of SCF solutions like reverse factoring and trade credit, existing literature lacks a unified theoretical framework that captures both financial and organizational complexities. Drawing from 47 peer-reviewed articles in leading supply chain journals, this study identifies key SCF dimensions—task characteristics, environment, and interdependence—as primary sources of uncertainty and information processing needs. It then examines how IT systems, coordination mechanisms, and organizational design enhance processing capacity, enabling firms to build SCF capabilities such as risk assessment, supplier onboarding, and financial process standardization. These capabilities facilitate financial supply chain integration through data connectivity, embedded flows, and collaborative planning. The study contributes a comprehensive conceptual model that connects SCF uncertainties, processing strategies, and performance outcomes, addressing theoretical and managerial gaps. It further provides a foundation for future empirical research and strategic design of SCF systems to enhance supply chain resilience and financial efficiency.

Keywords: Supply Chain Finance (SCF); Information Processing Theory (IPT); financial supply chain integration; SCF capabilities; SCF uncertainty (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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