Examining agricultural firms' risk-bearing capability via supply chain financing: Insights from China

This study examines how supply chain financing improves the resilience of agricultural firms by mitigating systemic financial vulnerabilities and promoting adaptive skills. This research utilizes data from China's A-share listed agricultural companies, employing text analysis to develop supply chain financial indicators and applying a two-way fixed effects model to examine causal links. Empirical findings indicate that supply chain finance enhances resilience by mitigating financial limitations and augmenting total factor productivity (TFP). Mechanisms, including liquidity injection, risk-sharing, and digital traceability, empower enterprises to stabilize operations amid disturbances, invest in climate-resilient technology, and optimize resource allocation. Heterogeneous effects highlight contextual differences: Non-state-owned firms, functioning under strict credit restrictions, gain larger resilience benefits than state-owned enterprises dependent on institutional support. Likewise, locations with sophisticated financial ecosystems enhance the influence of supply chain financing via digital integration, whereas underdeveloped sectors encounter structural inefficiencies. The complexity of supply chains further influences outcomes, with supply chain finance being particularly transformative in complex, multi-tiered networks that necessitate coordinated financial and operational flows. The findings support policy frameworks prioritizing supply chain finance as a key instrument for equitable economic stability, emphasizing targeted assistance for SMEs, developing digital infrastructure in underdeveloped areas, and incentives for sustainable practices.