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Government Support and Market Proximity: Exploring Their Relationship with Supply Chain Agility and Financial performance

Author

Listed:
  • Liliana Avelar-Sosa

    (Department of Industrial Engineering and Manufacturing 1, Universidad Autónoma de Ciudad Juárez, Ave. Del Charro 450 N, Col. Partido Díaz, Ciudad Juárez 32310, Mexico)

  • Jorge L. García-Alcaraz

    (Department of Industrial Engineering and Manufacturing 1, Universidad Autónoma de Ciudad Juárez, Ave. Del Charro 450 N, Col. Partido Díaz, Ciudad Juárez 32310, Mexico)

  • José M. Mejía-Muñoz

    (Department of Electrical and Computing Engineering 2, Universidad Autónoma de Ciudad Juárez, Ave. Del Charro 450 N, Col. Partido Díaz, Ciudad Juárez 32310, Mexico)

  • Aidé A. Maldonado-Macías

    (Department of Industrial Engineering and Manufacturing 1, Universidad Autónoma de Ciudad Juárez, Ave. Del Charro 450 N, Col. Partido Díaz, Ciudad Juárez 32310, Mexico)

  • Giner Alor Hernández

    (Tecnológico Nacional de México 3, Instituto Tecnológico de Orizaba, Ave. Oriente 9 No. 852, Col. Emiliano Zapata, Orizaba 94320, Mexico)

Abstract

The current paper presents a structural equation model with four variables ( Government , Infrastructure , Proximity to market, and supply chain Agility ) affecting the Financial performance of a company. Six hypotheses or relationships among variables are proposed, supposing that Government and market Proximity are key elements to achieve a greater Agility in supply chains, considering the regional Infrastructure to determine the impact on Financial performance in manufacturing companies. The model is validated with data from a survey applied to 225 persons in 65 manufacturing companies located in Ciudad Juárez, Chihuahua, Mexico. The model is evaluated using partial least squares, and the findings indicate that there is a direct and positive effect from the Government on regional Infrastructure with a rate of 0.436. When the Government supports the availability of land, energy resources, transportation, telecommunications, mobile telephones, and other services, a positive change is achieved in the Infrastructure and supply chain Agility . Furthermore, the Government also has a direct and positive effect on the market Proximity at a rate of 0.171; consequently, the regional Infrastructure also has an effect on it. Similarly, the market Proximity directly and positively influences the supply chain Agility , as well as a company’s Financial performance at a rate of 0.506.

Suggested Citation

  • Liliana Avelar-Sosa & Jorge L. García-Alcaraz & José M. Mejía-Muñoz & Aidé A. Maldonado-Macías & Giner Alor Hernández, 2018. "Government Support and Market Proximity: Exploring Their Relationship with Supply Chain Agility and Financial performance," Sustainability, MDPI, vol. 10(7), pages 1-20, July.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:7:p:2441-:d:157646
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    2. Xiao, Huijuan & Wang, Daoping & Qi, Yu & Shao, Shuai & Zhou, Ya & Shan, Yuli, 2021. "The governance-production nexus of eco-efficiency in Chinese resource-based cities: A two-stage network DEA approach," Energy Economics, Elsevier, vol. 101(C).

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