Supply chain network and information sharing effects of SMEs’ credit quality on firm performance: Do strong tie and bridge tie matter?
Journal of Enterprise Information Management
ISSN: 1741-0398
Article publication date: 30 July 2019
Issue publication date: 21 August 2019
Abstract
Purpose
The purpose of this paper is to examine how a supply chain (SC) network helps small and medium enterprises (SMEs) to obtain liquidity and working capital for enhancing their performance while developing the relationships among SC members through information sharing. Moreover, this study also investigates whether a strong tie or bridge tie improves the availability of SMEs’ credit and performance.
Design/methodology/approach
Using a survey approach, data were collected from textile SMEs, located in Pakistan. Structural equation modeling and hierarchical regression model were run to validate the proposed model and the relationships.
Findings
Findings highlighted that strong tie and bridge tie of SMEs positively and significantly enhance the credit quality and SMEs’ performance. Furthermore, information sharing significantly moderates the relationship between SC network ties and SMEs’ credit quality. Credit quality significantly explains the indirect (mediation) association between the strong tie and the firm performance.
Practical implications
This study will help the SMEs’ entrepreneurs and SC executives to strengthen the liquidity position of SME and improve SMEs’ performance by developing the bridge ties. SMEs should share more information in their SC network while performing business transactions so that financers or lenders can easily access their operational capabilities and individual characteristics to offer them quality credit such as supply chain finance (SCF).
Originality/value
SMEs always face the issue of risk-free financing which adversely affects the firm performance. This study covered the hidden gap in SCM and SMEs’ financing literature by identifying the crucial role of SCF as quality credit in the development of SMEs. Moreover, SMEs can get benefits (e.g. quality credit=SCF) for better embedding in an SC network through information sharing.
Keywords
Acknowledgements
This research was supported by the Natural Science Foundation of China (Nos 71731010 and 71571174).
Citation
Ali, Z., Gongbing, B. and Mehreen, A. (2019), "Supply chain network and information sharing effects of SMEs’ credit quality on firm performance: Do strong tie and bridge tie matter?", Journal of Enterprise Information Management, Vol. 32 No. 5, pp. 714-734. https://doi.org/10.1108/JEIM-07-2018-0169
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited