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Network working capital management, supply chain concentration, and corporate performance of focal companies

Empirical evidence from Chinese companies that implement supply chain finance

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Abstract

Based on the logical chain of “network working capital management (hereinafter, NWCM) → supply chain concentration (hereinafter, SCC) → corporate performance”, this study empirically and quantitatively explored the relationship between NWCM and corporate performance and the mediating effect of the SCC. Enterprise heterogeneity was considered. Specifically, we selected 312 companies listed on both the Shanghai and Shenzhen Exchanges from 2012 to 2022; these companies applied supply chain finance with the assistance of web crawling and textual analysis technology. The fixed effect panel regression model and the mediating model embedded with interaction terms were used in the empirical analysis. The empirical results showed that corporate performance had an inverted U-shaped relationship with NWCM, and the vertex was 1.123%. When the NWCM was less than the vertex, corporate performance was positively related to NWCM, and a negative relationship existed between them when NWCM was greater than the vertex. Moreover, the heterogeneity results showed differences among companies of different scales and with different ownership styles, and the mediating effect of SCC was negative, weakening the inverted U-shaped relationship between NWCM and corporate performance. The results of difference testing, instrumental variables analysis and Hausman-Taylor tests supported the robustness of the above conclusions.

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Data availability

The data that support the findings of this study are available from the corresponding author upon reasonable request.

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Funding

This work is partially supported by grants from the Major Humanities and Social Sciences Research Projects in Zhejiang higher education institutions (No. 2023GH031). This work is supported by the postgraduate fieldwork fund project of Zhejiang University of Finance and Economics.

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Authors and Affiliations

  1. School of Finance, Zhejiang University of Finance & Economics, Hangzhou, 310018, China

    Zhefan Piao, Kun Yang, Ning Su & Zihan Zheng

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  1. Zhefan Piao
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  2. Kun Yang
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  3. Ning Su
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  4. Zihan Zheng
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Contributions

All authors contributed to the study conception and design. Material preparation, data collection and analysis were performed by Zhefan Piao, Kun Yang, Ning Su and Zihan Zheng. The first draft of the manuscript was written by Zhefan Piao and all authors commented on previous versions of the manuscript. All authors read and approved the final manuscript.

Conceptualization: Zhefan Piao, Zihan Zheng; Methodology: Zhefan Piao, Kun Yang, Zihan Zheng, Ning Su; Formal analysis and investigation: Zhefan Piao, Kun Yang, Zihan Zheng; Writing – original draft preparation: Zhefan Piao, Zihan Zheng, Kun Yang; Writing – review and editing: Zhefan Piao, Zihan Zheng, Kun Yang; Funding acquisition: Zhefan Piao.

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Correspondence to Zihan Zheng.

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Piao, Z., Yang, K., Su, N. et al. Network working capital management, supply chain concentration, and corporate performance of focal companies. Oper Manag Res (2024). https://doi.org/10.1007/s12063-024-00484-2

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