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

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.

KEYWORDS:

• Supply chain concentration
• inventory performance
• credit rating
• SMEs
• emerging markets

JEL CLASSIFICATION:

• C39
• D21
• G32
• M10

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The data that support the findings of this study are available from the corresponding author [KP] upon reasonable request.

Additional information

Funding

This work was supported by the Humanities and Social Sciences Foundation of the Ministry of Education of China (Grant No. 21YJC630076);this study is supported by Korea University Business School Research Grant.