SMEs’ Digital Transformation and Supply Chain Finance: The Mediating Role of Information Asymmetry
Abstract
Small and medium-sized enterprises (SMEs) are vital to an economy but often face financing constraints due to information asymmetry. Supply chain finance (SCF) has emerged as a solution, combining supply chain and financial services to accelerate capital turnover, optimize fund flow, and improve operational efficiency. Reducing information asymmetry can significantly enhance supply chain financial performance (SCFP). However, while digital transformation improves firms' financing ability by strengthening internal controls and fostering robust supply chain relationships, the role of reduced information asymmetry in this process remains underexplored, particularly in the context of SMEs in China. This gap calls for further investigation into how digital transformation mitigates information asymmetry for SMEs and enhances their SCFP. Therefore, this study examines how SMEs' digital transformation impacts supply chain finance, particularly by exploring the mediating role of information asymmetry. Using data from Chinese A-share listed companies from 2014 to 2023, multiple regression analysis revealed that digital transformation significantly reduces information asymmetry, thereby improving SCFP. Additionally, information asymmetry mediates the relationship between digital transformation and SCFP. This study advances the theoretical understanding of SCFP in the digital era by providing evidence on how digital transformation reduces information asymmetry and enhances SCFP, particularly for SMEs. The findings offer theoretical insights and practical implications for policymakers in designing targeted financial frameworks to facilitate SME financing towards sustainable economic growth.
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