Can Supply Chain Finance Reduce Corporate Financial Risks?

Abstract

As an emerging financial format, supply chain finance is of great significance in alleviating enterprises' capital problems. Based on the relevant data of China's A-share listed companies from 2010 to 2020, this paper empirically tests the impact of supply chain finance on corporate financial risks. The study finds that supply chain finance can significantly reduce corporate financial risks. Mechanism analysis shows that supply chain finance reduces corporate financial risks mainly through two paths: reducing corporate financing constraints and agency costs. Extended research finds that the inhibitory effect of supply chain finance on corporate financial risks is more obvious in private enterprises and large-scale enterprises. The conclusions of this paper provide new references and bases for reducing corporate financial risks, improving corporate financial stability, and strengthening corporate risk prevention and control.