Scandinavian Working Papers in Economics

Working Paper Series,
Sveriges Riksbank (Central Bank of Sweden)

No 435: Supply-Chain Finance: An Empirical Evaluation of Supplier Outcomes

Niklas Amberg (), Tor Jacobson () and Yingjie Qi ()
Additional contact information
Niklas Amberg: Research Department, Central Bank of Sweden, Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden
Tor Jacobson: Research Department, Central Bank of Sweden, Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden
Yingjie Qi: Copenhagen Business School

Abstract: Buyers and suppliers have diverging interests about trade-credit maturities: buyers desire long payment periods as a source of cheap funding, while suppliers prefer swift payments to avoid locking up scarce liquidity in idle assets. A fast-growing financial product innovation—supply-chain finance (SCF)—offers to resolve these diverging interests, but its net effect on suppliers is a priori unclear. We study the effects of SCF programs on suppliers using unique invoice-level data from a large Swedish bank. We find that SCF programs relax suppliers’ liquidity constraints and thereby enable them to grow their sales, employment, and investments.

Keywords: Trade credit; supply-chain finance; reverse factoring; financial constraints

JEL-codes: D22; G21; G32

Language: English

37 pages, May 1, 2024

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