Market adoption of reverse factoring

Matthew J. Reindorp · Nico Dellaert

72 citations0/0 files storedInternational Journal of Physical Distribution & Logistics Management

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Working Capital and Financial Performance Supply Chain and Inventory Management Sustainable Supply Chain Management

Abstract

Purpose – The purpose of this paper is to show that market dynamics can significantly influence the lifecycle and value of a supply chain finance (SCF) arrangement. Design/methodology/approach – Based on a review of scientific and trade literature, the authors construct a model of market dynamics for reverse factoring, a specific type of SCF arrangement. The authors assume that firms’ participation in a reverse factoring arrangement is determined by the direct benefits they can derive from it. The authors analyse the model by means of simulation in system dynamics. Findings – The authors identify the following market factors as key for direct benefits: competition, interest rates, receivables volumes, and firms’ working capital goals. The authors find that reverse factoring can yield direct benefits for all supply chain participants, but that these benefits are highly sensitive to market conditions. Research limitations/implications – The model is stylized, but this study shows the need for further research on the dynamic aspects of SCF arrangements. Practical implications – The authors show that supply chain actors should carefully consider the expected evolution of market factors when deciding on participation in a reverse factoring arrangement. Originality/value – Existing research on SCF arrangements almost exclusively considers a static context, where market factors take fixed, known values. The authors provide the first study that links the direct benefits of SCF arrangements to dynamic, interacting market factors. The authors utilize system dynamics, a methodology well-suited to the analysis of such settings, to show that a comprehensive assessment of SCF arrangements cannot neglect the evolutionary perspective.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 72 citations exist upstream.

References

1958The Cost of Capital, Corporation Finance and the Theory of Investment 2000Business Dynamics: Systems Thinking and Modeling for a Complex World 2008The cost of capital, corporation finance and the theory of investment 1996Financial Dependence and Growth 2002Small Business Credit Availability and Relationship Lending: The Importance of Bank Organisational Structure 2009Supply chain finance: optimizing financial flows in supply chains 2013A review of trade credit literature: Opportunities for research in operations 2013Focusing the financial flow of supply chains: An empirical investigation of financial supply chain management

Cited by

2019Collect payment early, late, or through a third party's reverse factoring in a supply chain 2018Factors, Outcome, and the Solutions of Supply Chain Finance: Review and the Future Directions 2022Optimal selection of supply chain financing programmes for a financially distressed manufacturer 2021An empirical analysis of suppliers' trade-off behaviour in adopting digital supply chain financing solutions 2018

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.