Supply Chain Finance: Cost–Benefit Differentials under Reverse Factoring with Extended Payment Terms

This article studies the effects of reverse factoring in a supply chain when buyer company facilitates its lower short-term borrowing rates to supplier corporation return for extended payment terms. We explore role interest rate changes, rating and business cycle position on cost benefit trade-off from perspective. utilize combined empirical approach consisting an event study Step 1 simulation model 2. The identifies quantitative magnitude central bank decisions changes differential. computes with rolling-window methodology daily benefits 2010 2018 under assumption efficient market hypothesis. Our major finding is that crucial financial variables such as rates, ratings, or news alerts will turn former win–win into win–lose situations contingent cycle. Overall, our results exhibit sophisticated trade-offs consequently require careful evaluation managerial decisions.