The joint effects of lead time, information sharing, and the accounts receivable period on reverse factoring

Purpose - This study aims to empirically investigate the mechanisms through which lead time, information sharing, and accounts receivable period jointly affect reverse factoring adoption using a supplier’s perspective.
Design/methodology/approach - Supported by one of the largest Chinese commercial banks, survey data are collected from 424 Chinese manufacturing firms and are analysed using regression methods.
Findings - The results suggest that lead time positively affects suppliers’ reverse factoring adoption and the accounts receivable period. Meanwhile, information sharing has a positive influence on suppliers’ reverse factoring adoption but negatively affects accounts receivable period. Accounts receivable period also positively affects suppliers’ reverse factoring adoption.
Originality/value - The findings give suppliers and financial institutions a better understanding of how to leverage the benefits of reverse factoring.