Abstract

ABSTRACT This research is grounded in the information processing theory and aims to assess the impact of supply chain financial instability and supply chain management capabilities (e.g. supply chain finance and trade digitization) on the performance of a focal firm. In particular, we consider the impact of supply chain financial instability as information processing needs and supply chain finance and trade digitization as information processing capabilities. We discuss how the fit between the information processing capabilities and the information processing needs improves a firm’s performance, which results in competitive advantage. Path analyses were performed using data collected from 199 manufacturing enterprises in China. The results suggest that when supply chain finance and trade digitization are fitted with the needs to mitigate the impact of supply chain financial instability, a focal firm’s performance can be improved through reduced costs, enhanced efficiency, and bolstered market value. These value-adding outcomes would help gain competitive advantage.

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