The impact of servitization on trade credit in manufacturing firms: a signaling theory perspective

Weijiao Wang, Shanshan Chen, Jinan Shao, Junfei Chu, Zhe Yuan

Research output: Journal PublicationArticlepeer-review

Abstract

Purpose
The aim of this study is to empirically test the link between servitization and trade credit in manufacturing firms as well as the boundary conditions of this link.

Design/methodology/approach
Using a unique dataset of 4,974 observations covering 838 manufacturing firms publicly listed in the United States during 1990–2020, this study examines the impact of servitization on trade credit and the moderating impacts of financial slack and service relatedness based on fixed-effect regression models.

Findings
The authors find that servitization shows a U-shaped relationship with trade credit. Besides, financial slack negatively moderates this U-shaped relationship whereas service relatedness has no significant impact on this relationship.

Originality/value
This paper is the first to empirically verify the influence of servitization on trade credit in manufacturing firms based on longitudinal secondary data and signaling theory. The research findings can provide several important theoretical and managerial implications for scholars and practitioners in operations management.
Original languageEnglish
JournalInternational Journal of Operations & Production Management
DOIs
Publication statusPublished - 17 Nov 2022

Keywords

  • Servitization
  • Trade credit
  • Financial slack
  • Service relatedness
  • Signaling theory

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