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Influence of dynamic capabilities and supply chain finance on supply chain effectiveness in environmental dynamism: a conditional process analysis

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Abstract

Despite the global COVID-19 epidemic, the "domino effect" continues to detrimentally impact business operations, with firms unable to adapt and facing the potential for bankruptcy. Dynamic capabilities (DCs) may help firms overcome challenges in constantly changing operational environments, making financial advantages critical for operations. The existing literature hasn’t yet shown an association between DCs, and economic benefits in the supply chain. Drawing on dynamic capabilities view (DCV), this research examines whether DCs can contribute to financing advantages for manufacturing firms and subsequently enhance supply chain effectiveness (SCE). Dynamic capabilities and supply chain finance (SCF) are difficult to capture variables, so we use online questionnaires to collect data from manufacturing companies in the Yangtze River Delta region and then analyze them through advanced structural equation modeling (SEM). The empirical analysis revealed that DCs can effectively enhance financing advantages, with SCF as the most prominent source of financial aid. The empirical findings demonstrate that both DCs and SCF contribute to SCE to varying degrees, and the environmental dynamism (ED) moderates this relationship, filling gaps in existing studies. Such novel insights provide managers with novel ideas to motivate companies to adopt measures such as digital transformation to improve financial and operational performance in response to a range of supply chain uncertainties, including declining customer demand, resource shortages, rising production costs, and cash flow constraints. The current study explores how DCs can promote financing advantages and SCE under ED, enhancing the understanding of DCs development.

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Notes

  1. The World Bank announced that the global GDP in 2019 was 87.65 trillion US dollars, https://data.worldbank.org/indicator/NY.GDP.MKTP.CD.

  2. https://tv.cctv.com/2020/03/03/VIDEsCdOmydghyJnmejL7Pjp200303.shtml?spm=C52448022284.Pr90CcbXRymj.0.0.

Abbreviations

AVE:

Average variance extracted

CR:

Composite reliability

CFA:

Confirmatory factor analysis

CMB:

Common method bias

DCs:

Dynamic capabilities

DCV:

Dynamic capabilities view

ED:

Environmental dynamism

EFA:

Exploratory factor analysis

KMO:

Kaiser-Meyer-Olkin

PLS:

Partial least squares

PM:

Performance measurement

RMSEA:

Root means square error of approximation

SCAD:

Supply chain adaptability

SCAG:

Supply chain agility

SCE:

Supply chain effectiveness

SCF:

Supply chain finance

SEM:

Structural equation modeling

VIFs:

Variance inflation factors

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Authors and Affiliations

  1. IIF, School of Management, University of Science and Technology of China, Hefei, People’s Republic of China

    Jiyang Cheng & Gongbing Bi

  2. Department of Trade and Finance, Faculty of Economics and Management, Czech University of Life Sciences, Prague, Czech Republic

    Umer Shahzad

  3. Adnan Kassar School of Business, Lebanese American University, Beirut, Lebanon

    Umer Shahzad

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  1. Jiyang Cheng
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  2. Gongbing Bi
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Cheng, J., Bi, G. & Shahzad, U. Influence of dynamic capabilities and supply chain finance on supply chain effectiveness in environmental dynamism: a conditional process analysis. Oper Manag Res 17, 307–323 (2024). https://doi.org/10.1007/s12063-023-00425-5

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