The Relationship between Supply Chain Network and Information Sharing Toward Credit Quality

Abstract

Purpose – The purpose of this paper is to examine the effect of organization supply chain network and information sharing on influencing credit quality, or more specifically, whether bridging tie (structural network) or strong tie (relational network) and information sharing of organizational in the supply chain can improve the availability of credit quality. Design/methodology/approach – A survey was conducted in manufacturing industry in Malaysia and 100 valid questionnaires were used to test all the hypotheses. The data were then analyzed by employing partial least squares path modeling. Practical implication - Although in-depth interviews complemented the survey in this study, the complex supply chain structure and financing processes have not been explored. Findings – The results suggest that strong tie, bridging tie and information sharing of organizational can lead to a positive effect on credit quality, which can further enhance the credit quality for organization. Originality/value – Despite their crucial role in sustaining national economies, organization are beset by the critical constraint of risk-free financing. Based on a survey, this research finds that the credit quality of organization is affected by three important factors: concerns information sharing, bridging ties and strong ties in supply chain that relates to the attributes of credit quality of organization. This study implies that a organization may have a financing advantage for better embedding in the supply chain network, but different effects will be experienced according to constraints associated with information asymmetry in the supply chain.