How does supply chain finance influence the bullwhip effect? A signaling theory perspective

Purpose The purpose of this study is to explore the role of supply chain finance in alleviating the bullwhip effect based on signaling theory. Furthermore, it also examines the contingent effects of artificial intelligence adoption and corporate social responsibility disclosure. Design/methodology/approach This study constructs a theoretical model based on signaling theory and uses a fixed-effects model to analyze the data from Chinese listed companies from 2011 to 2021 to test the proposed hypotheses. Findings The results indicate that by adopting supply chain finance, firms experience reduced supply-demand fluctuations, thereby mitigating the bullwhip effect in the supply chain. Additionally, both artificial intelligence adoption and corporate social responsibility disclosure weaken the negative impact of supply chain finance on the bullwhip effect. Originality/value This study provides a signaling-theory explanation for the negative association between supply chain finance and bullwhip effect, while expanding the application of signaling theory. Furthermore, by considering artificial intelligence adoption and corporate social responsibility disclosure as substitutive signals, this study clarifies boundary conditions for the relationship between supply chain finance and bullwhip effect.