Financial Shared Services and Dynamic Adjustment of Working Capital: A Moderated Analysis of Supply Chain Concentration

Digital technologies are increasingly adopted in corporate liquidity management, yet whether financial digitalization enables firms to achieve more effective working capital adjustment remains insufficiently understood. Financial shared services (FSS) may strengthen information integration, process standardization, and operational coordination, but existing research provides limited evidence on how external supply chain conditions shape the relationship between FSS and working capital adjustment effectiveness. Prior studies have focused primarily on adjustment speed rather than adjustment effectiveness, namely the extent to which firms maintain working capital close to target levels. Using panel data from Chinese A-share listed firms from 2014 to 2023, this study examines whether FSS is associated with the effect of working capital adjustment (DEV) and whether supply chain concentration moderates this relationship. Drawing on dynamic trade-off theory and information asymmetry theory, this study employs high-dimensional fixed-effects models to examine how internal information capabilities and external supply chain conditions jointly shape working capital adjustment. The findings show that firms adopting FSS tend to exhibit smaller deviations from target working capital levels, which is consistent with more effective adjustment. However, this association becomes weaker as supply chain concentration increases, suggesting that external dependence may constrain firms’ ability to translate enhanced internal information capabilities into improved working capital outcomes. Further analysis suggests that customer concentration plays a more prominent moderating role. This study extends the understanding of digital-enabled financial management beyond internal process improvement and identifies supply chain structure as an important boundary condition relevant to the value of FSS.