{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,5,3]],"date-time":"2026-05-03T03:07:15Z","timestamp":1777777635971,"version":"3.51.4"},"reference-count":7,"publisher":"Emerald","issue":"2-3","content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":[],"published-print":{"date-parts":[[2019,3,14]]},"abstract":"<jats:p>This chapter focuses on the relative efficiency of two innovation pre-shipment financing schemes that enable suppliers to obtain financing for production: purchase order financing (POF, under which financial institutions offer loans to suppliers by considering the value of purchase orders) and buyer direct financing (BDF, under which manufacturers lend directly to suppliers). Both schemes are closely related to suppliers\u2019 performance risk (whether the supplier can deliver the order successfully). When the manufacturer and the bank have symmetric information regarding the supplier\u2019s operational capabilitiy, we find that even though POF and BDF yield the same payoffs, BDF allows more flexibility in contract terms. However, when the manufacturer has superior information, BDF leads to higher payoffs when the supplier is severely financially constrained. The relative benefit of BDF is more pronounced when the supply market contains a larger fraction of inefficient suppliers, when efficiency gaps between suppliers are greater, or when the manufacturer\u2019s alternative sourcing option is more expensive.<\/jats:p>","DOI":"10.1561\/0200000091","type":"journal-article","created":{"date-parts":[[2019,3,14]],"date-time":"2019-03-14T06:44:08Z","timestamp":1552545848000},"page":"135-151","source":"Crossref","is-referenced-by-count":3,"title":["Financing Suppliers under Performance Risk"],"prefix":"10.1108","volume":"12","author":[{"given":"Christopher S.","family":"Tang","sequence":"first","affiliation":[{"name":"Anderson School of Management, UCLA"}],"role":[{"role":"author","vocabulary":"crossref"}]},{"given":"S. Alex","family":"Yang","sequence":"additional","affiliation":[{"name":"The University of Hong Kong"}],"role":[{"role":"author","vocabulary":"crossref"}]},{"given":"Jing","family":"Wu","sequence":"additional","affiliation":[{"name":"College of Business, City University of Hong Kong"}],"role":[{"role":"author","vocabulary":"crossref"}]}],"member":"140","published-online":{"date-parts":[[2019,3,14]]},"reference":[{"issue":"1","key":"2026040905281262900_ref001","doi-asserted-by":"crossref","first-page":"1","DOI":"10.1287\/msom.2018.0706","article-title":"Introduction to the Special Issue on Research at the Interface of Finance, Operations, and Risk Management (iFORM): Recent Contributions and Future Directions","volume":"20","author":"Babich","year":"2018","journal-title":"Manufacturing & Service Operations Management"},{"key":"2026040905281262900_ref002","volume-title":"Competing in a flat world: building enterprises for a borderless world","author":"Fung","year":"2007"},{"key":"2026040905281262900_ref003","unstructured":"Gustin, D.\n           (2014). \u201cPurchase order finance, the tough nut to crack\u201d. Accessed at August 20, 2015. url:http: \/ \/ spendmatters. com \/ tfmatters\/purchase-order-finance-the-tough-nut-to-crack\/."},{"issue":"2","key":"2026040905281262900_ref004","doi-asserted-by":"crossref","first-page":"451","DOI":"10.1016\/j.ijpe.2005.12.006","article-title":"Perspectives in supply chain risk management","volume":"103","author":"Tang","year":"2006","journal-title":"International Journal of Production Economics"},{"issue":"1","key":"2026040905281262900_ref005","doi-asserted-by":"crossref","first-page":"70","DOI":"10.1287\/msom.2017.0638","article-title":"Sourcing from Suppliers with Financial Constraints and Performance Risk","volume":"20","author":"Tang","year":"2018","journal-title":"Manufacturing & Service Operations Management"},{"key":"2026040905281262900_ref006","unstructured":"Tice, C.\n           (2010). \u201cCan a Purchase Order Loan Keep Your Business Growing?\u201d Accessed at March 10, 2015. url:http:\/\/www.entrepreneur. com\/article\/207058."},{"issue":"8","key":"2026040905281262900_ref007","doi-asserted-by":"crossref","first-page":"3667","DOI":"10.1287\/mnsc.2017.2799","article-title":"Trade Credit, Risk Sharing, and Inventory Financing Portfolios","volume":"64","author":"Yang","year":"2018","journal-title":"Management Science"}],"container-title":["Foundations and Trends\u00ae in Technology, Information and Operations Management"],"original-title":[],"language":"en","link":[{"URL":"https:\/\/www.emerald.com\/fttom\/article-pdf\/12\/2-3\/135\/11505783\/0200000091en.pdf","content-type":"application\/pdf","content-version":"vor","intended-application":"syndication"},{"URL":"https:\/\/www.emerald.com\/fttom\/article-pdf\/12\/2-3\/135\/11505783\/0200000091en.pdf","content-type":"unspecified","content-version":"vor","intended-application":"similarity-checking"}],"deposited":{"date-parts":[[2026,4,29]],"date-time":"2026-04-29T19:01:52Z","timestamp":1777489312000},"score":1,"resource":{"primary":{"URL":"https:\/\/www.emerald.com\/fttom\/article\/12\/2-3\/135\/1358582\/Financing-Suppliers-under-Performance-Risk"}},"subtitle":[],"short-title":[],"issued":{"date-parts":[[2019,3,14]]},"references-count":7,"journal-issue":{"issue":"2-3","published-print":{"date-parts":[[2019,3,14]]}},"URL":"https:\/\/doi.org\/10.1561\/0200000091","relation":{},"ISSN":["1571-9545","1571-9553"],"issn-type":[{"value":"1571-9545","type":"print"},{"value":"1571-9553","type":"electronic"}],"subject":[],"published":{"date-parts":[[2019,3,14]]}}}