Is inventory performance helping to improve SME credit ratings? The moderating role of supply chain concentration

Abstract

ABSTRACT This study examines the relationship between inventory performance and credit ratings and explores how this relationship is affected by supply chain concentration in the context of small- and medium-sized enterprises (SMEs). Financial indicators and bond rating data for SMEs in China’s manufacturing sector are obtained from two large public data sources, and hierarchical ordered logistic regression analysis is used to investigate our research questions. The findings show that inventory performance is positively associated with SME credit ratings and that this relationship is positively moderated by customer concentration but negatively moderated by supplier concentration. This study provides valuable theoretical contributions to the interface of supply chain and finance research and offers important managerial implications that SMEs can follow to increase their credit ratings.