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Impact of supplier instability on supply chain financing: A social systems theory perspective

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  • Du, Ke
  • Jia, Fu
  • Chen, Lujie
  • Yang, Ying

Abstract

Developing supply chain financing (SCF) requires consideration of the complex external environmental factors faced by buyers in supply chains. One of them is supplier instability (SI). However, prior research has primarily focused on examining the motivations of buyers and suppliers to participate in SCF, with less attention given to the complexity facing buyers while receiving SCF. Drawing on social systems theory (SST), the objective of this study is to examine the impact of SI on engagement in SCF by the buying firms, and the moderating role of power and financial slack in this relationship. Using a large panel dataset of Chinese manufacturing listed firms from 2015 to 2023, we find that SI harms SCF. Possessed power and realized power mitigate the negative impact of SI on SCF. Financial slack reduces the inhibitory effect of possessed power on the negative impact of SI on SCF, but promotes the inhibitory effect of realized power on the relationship. Our study contributes to SCF research by using SST as the theoretical lens for identifying how SI, power, and financial slack affect engagements in SCF by buying firms. Furthermore, our research extends the understanding of SST by considering the interactive effects of increase collaboration and internal complexity.

Suggested Citation

  • Du, Ke & Jia, Fu & Chen, Lujie & Yang, Ying, 2026. "Impact of supplier instability on supply chain financing: A social systems theory perspective," International Journal of Production Economics, Elsevier, vol. 297(C).
    • Handle: RePEc:eee:proeco:v:297:y:2026:i:c:s0925527326001039
    DOI: 10.1016/j.ijpe.2026.110012
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