Studying the Factors Affecting the Financing of Small and Medium Enterprises in Automotive Parts Supply Chains

Document Type : Research Paper


1 Associate Prof. of Industrial Management, Tehran University, , Iran.

2 Prof., Faculty of Industrial Engineering and Management Systems, Amirkabir University, , Iran

3 Ph.D. Candidate of Industrial Management, Faculty of Management, Tehran University, Tehran, Iran


The automotive production has weakened due to the downturn in car production and financial problems of car segment makers in recent years, so financial support of the small and medium enterprises is one of the essential requirements in the country's economic development programs. The purpose of this research is to present a structural model to examine the components that affect the financing of small and medium-sized enterprises in the car segment chain. This article uses the review of the theoretical literature and interviews with experts about the identified variables which affect the financing of small and medium enterprises and were stratified by using the structural equation method in 6 dimensions. Then, the research hypotheses were analyzed by using T-Student test. The results showed that 6 main dimensions are included: poor performance of banks, poor performance of the capital markets, the lack and weakness of specialized banks, the lack and weakness of financing methods, lack of cooperation and coordination between firms and financial institutions, these weaknesses effects on the financing of small and medium enterprises in the car segmentation chain.


Aberdeen Group Report. (2006a). New Strategies for Financial Supply Chain Optimization. available at: BM_FinSCOptimization_VS_BE_3606.aspx (accessed 11 September 2011).
Barth, J.R., Lin, D., Yost, K. (2011). Small and Medium Enterprise Financing in Transition Economies. Atlantic Economic Journal, 3(9), 19–38.
Bazargan, A. (2015). Introduction to qualitative and mixed methods research; Common approaches in behavioral science. Didar publication, Tehran.
(in Persian)
Chin, W.W. (1998). Issues and opinion on structural equation modeling. MIS Quarterly, 22(1), 7-16.
Cronie, G. (2008). ING Guide to Financial Supply Chain Optimization. ING Wholesale Banking [Online]. Available from: show article.php?article=1032.[Accessed 29 April 2011].
Czarnitzki, D. (2006). Research and development in small and medium-sized enterprises: The role of financial constraints and public funding. Scottish Journal of Political Economy, 5(3), 335-357.
Davari, A., Rezazadeh, A. (2013). Structural equation modeling using PLS software. University of Tehran press. Tehran. (in Persian)
Demica, L., (2007). The Growing Role of Supply Chain Finance in a Changing World. Available at: strengthening.pdf (accessed 22 September 2011).
Fathollah, M., Najafi, M. (2016). Development of financial management and supply chain financing. International Conference on Industrial Engineering (ICIE 2016). Kharazmi University, Tehran. (in Persian)
Fornell, C., Larcker, D.F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of marketing research, 18 (1), 39-50.
Hartley-Urquhart, R. (2006). Managing the financial supply chain. Supply Chain Management Review, 10(6), 18-25.
Hofmann, E., Belin, O. (2011). Supply Chain Finance Solutions. Springer Briefs in Business, Springer-Verlag Berlin Heidelberg.
Hyz, A. (2011). Small and Medium Enterprises (SMEs) in Greece - Barriers in Access to Banking Services. An Empirical Investigation. International Journal of Business and Social Science, 2(2),161-165.
Kristofik, P., Kok, J., De Vries, S., van Sten-van’t Hoff, J. (2012). Financial supply chain management challenges and obstacles. ACRN Journal of Entrepreneurship Perspectives, 1(2), 132-143.
Mohammadi, F., Najafi, A. (2015). Study the supply chain finance performance in order to facilitate working capital and liquidity. First International Conference on Accounting, Audit, Management and Economic. (in Persian)
Mohsenin, S., Esfidani, M. (2014). Structural equation modeling approach based on partial least squares using PLS software.Mehraban nashr publication, Tehran. (in Persian)
More, D., Basu, P. (2013). Challenges of supply chain finance; A detailed study and a hierarchical model based on the experiences of an Indian firm. Business Process Management Journal, 19(4), 624-647.
Myers, J.R. (2002). Supply Chain Finance. US Patent Application Publication, 10/219, 726, 200.
Nkuah, J.K., Tanyeh, J.P., Gaeten, K. (2013). Financing Small and Medium Enterprises (SMEs) in Ghana: Challenges and Determinants in Accessing Bank Credit. International Journal of Research in Social Sciences. 2(3), 12-25.

Osano, H.M., Languitone, H. (2016). Factors influencing access to finance by SMEs in Mozambique: case of SMEs in Maputo central business district. Journal of Innovation and Entrepreneurship, 5(13), 1-16.

Pfohl, H.C., Gomm, M. (2009). Supply chain finance: optimizing financial flows in supply chains, Logistics Research, 1(3), 149-161.
Robinson, P. (2007). Financial supply chain management – part 1: changing dynamics. Available at: (Accessed 20 August 2011).
Rossi, M., Lombardi, R., Siggia, D., Oliva, N. (2016). The impact of corporate characteristics on the financial decisions of companies: evidence on funding decisions by Italian SMEs. Journal of Innovation and Entrepreneurship, 5(2), 1-14.
Ryan, R., O'Toole, C. M., & McCann, F. (2014). Does Bank Market Power Affect SME Financing Constraints? Journal of Banking & Finance, published online. DOI:
Soltani, Z., Khoshnud, Z., Akbari Alashti, T. (2011). Financing Methods for Small and Medium Sized Enterprises. Monetary and Banking Research Academy. Central Bank of the Islamic Republic of Iran. (in Persian)
Stephenson, M., Hutter, L. (2009). Supply Chain Finance: Releasing working capital within the supply chain. Deloitte [Online]. Available from: http://www. SupplyChainFinance. [Accessed 12 May 2011].
Taleghani, M., Sayadmanesh, S., Kaviyani, M. (2013). Supply chain finance (SCF) as a new method of SME's financing. Engineering Management Journal, 7 (55), 20-27. (in Persian)
Tenenhaus, M., Amato, S., Esposito Vinizi, V. (2004). A global goodness of fit index for PLS structural equation modeling. In proceeding of the XLII SIS scientific meeting. PP. 739-742.
Wetzels, M., Odekerken-Schoroder, G., Van Oppen, C. (2009). Using PLS path modeling for assessing hierarchical construct models: Guidelines and empirical illustration. MIS Quarterly, 33 (1), 177-193.
Wuttke, D.A., Blome, C., Foerstl, K., Henke, M. (2013) Managing the innovation adoption of supply chain _nanceempirical evidence from six European case studies. Journal of Business Logistics, 34(2), 148 -166.
Wuttke, D., Constantin, B., Michael, H. (2013). Focusing the financial flow of supply chains: An empirical investigation of financial supply chain management. International Journal of Production Economics, 145(2), 773–789.