Supply chain finance, financial development and profitability of real estate firms in Vietnam

Abstract: This paper investigates the impact of supply chain finance (SCF) and financial development on profitability of real estate firms in Vietnam over the 2013 - 2017 period. This is the first empirical research examining the impact of financial development on firm profitability. By employing GMM (generalized method of moment), this paper reveals the important role of supply chain finance (SCF) and financial development in profitability of real estate firms. Specifically, firm profitability (P) is influenced negatively by cash conversion cycle (CCC) and positively by financial development (FD). In addition, profitability is negatively correlated with control variable of financial leverage (LEV) and positively associated with control variable of firm size (SIZE). The findings reveal the role of supply chain finance and financial development in firm profitability which policymakers as well as managers at real estate firms can apply suitable methods in order to improve firms’ profits.

How to cite this paper

 Bui, T. (2020). Supply chain finance, financial development and profitability of real estate firms in Vietnam.Uncertain Supply Chain Management, 8(1), 37-42.

Refrences

Adeniyi, O., Oyinlola, A., Omisakin, O., & Egwaikhide, F. O. (2015). Financial development and economic growth in Nigeria: Evidence from threshold modelling. Economic Analysis and Policy, 47, 11–21.
Caniato, F., Gelsomino, L. M., Perego, A., & Ronchi, S. (2016). Does ﬁnance solve the supply chain ﬁnancing problem? Supply Chain Management, 21(5), 534–549.
Dong, Y., Xu, K., & Dresner, M. (2007). Environmental determinants of VMI adoption: an exploratory analysis. Transportation Research Part E: Logistics and Transportation Review, 43(4), 355–369.
Doytch, N., & Uctum, M. (2011). Does the worldwide shift of FDI from manufacturing to services accelerate economic growth? A GMM estimation study. Journal of International Money and Finance, 30(3), 410–427.
Driffill, J., Psaradakis, Z., & Sola, M. (1998). Testing the expectations hypothesis of the term structure using instrumental variables. International Journal of Finance and Economics, 3(4), 321–325.
Eren, B. M., Taspinar, N., & Gokmenoglu, K. K. (2019). The impact of financial development and economic growth on renewable energy consumption: Empirical analysis of India. Science of The Total Environment, 663, 189–197.
Farris, M. T, & Hutchison, P. D. (2002). Cash-to-Cash: the new supply chain management metric. International Journal of Physical Distribution & Logistics Management, 32(4), 288–298.
Fowowe, B. (2017). Access to finance and firm performance: Evidence from African countries. Review of Development Finance, 7(1), 6–17.
Gul, S., Khan, M. B., Rehman, S. U., Khan, M. T., Khan, M., & Khan, W. (2013). Working Capital Management and Performance of SME Sector. European Journal of Business and Management, 5(1), 60–68.
Klapper, L. F. (2006). The role of factoring for financing small and medium enterprises. Journal of Banking & Finance, 30(11), 3111–3130.
Lekkakos, S. D., & Serrano, A. (2016). Supply chain finance for small and medium sized enterprises: the case of reverse factoring. International Journal of Physical Distribution & Logistics Management, 46(4), 367–392.
Liebl, J., Hartmann, E., & Feisel, E. (2016). Reverse factoring in the supply chain: objectives, antecedents and implementation barriers. International Journal of Physical Distribution & Logistics Management, 46(4), 393–413.
Lim, T. (2018). Growth, financial development, and housing booms. Economic Modelling, 69, 91–102.
Marak, Z. R., & Pillai, D. (2019). Factors, Outcome, and the Solutions of Supply Chain Finance: Review and the Future Directions. Journal of Risk and Financial Management, 12(3), 1–23.
Pfohl, H. C., & Gomm, M. (2009). Supply chain finance: optimizing financial flows in supply chains. Logistics Research, 1(3), 149–161.
Polak, P., Sirpal, R., & Hamdan, M. (2012). Post-crisis emerging role of the treasurer. European Journal of Scientific Research, 86(3), 319–339.
Pradhan, R., Arvin, M., Hall, J., & Bahmani, S. (2014). Causal nexus between economic growth, banking sector development, stock market development, and other macroeconomic variables: The case of ASEAN countries. Review of Financial Economics, 23(4), 155–173.
Raddatz, C. (2010). Credit chains and sectoral comovement: Does the use of trade credit amplify sectoral shocks?. The Review of Economics and Statistics, 92(4), 985–1003.
Raghavan, N. S., & Mishra, V. K. (2011). Short-term ﬁnancing in a cash-constrained supply chain. International Journal of Production Economics, 134(2), 407–412.
Zaman, K., Izhar, Z., Khan, M. M., & Ahmad, M. (2012). The relationship between ﬁnancial indicators and human development in Pakistan. Economic Modelling, 29(5), 1515–1523.
Zhang, T., Zhang, C. Y., & Pei, Q. (2019). Misconception of Providing Supply Chain Finance: Its Stabilising Role. International Journal of Production Economics, 213, 175–184.
Wuttke, D. A., Blome, C., Foerstl, K., & Henke, M. (2013). Managing the innovation adoption of supply chain finance – empirical evidence from six European case studies. Journal of Business Logistics, 34(2), 148–166.