The impact of alternative financial supply chain management practices on supply risk: A relationship quality and buyer relative power perspective

Abstract

Despite increasing attention being paid to financial supply chain management (FSCM) practices as key factors that enable firms to gain competitive advantage, there is limited research on the consequences of such practices and their impact on buyer-supplier relationships. In particular, the existing literature lacks evidence of how FSCM practices can help buying firms to manage their supply-side risk. Using the two theoretical angles of relationship quality and buyer relative power, this study empirically examines the impact of FSCM practices on supply risk. Based on a cross-sectional survey of 244 manufacturers in Iran, the results show that depending on the quality of the buyer-supplier relationship and the level of buyer relative power, different FSCM practices should be implemented to mitigate supply risk. Our empirical findings present important implications for both theory and practice.