Relevance of the cooperation in financing the automobile industry's supply chain: the case of reverse factoring

This study examines the motives and enabling factors regarding reverse factoring (RF) adoption in the automobile industry's supply chain.

This is a qualitative case study based on in-depth interviews with financial institutions in two countries having different statuses within the automobile industry global value chain: Mexico as a peripheral and Spain as a semi-peripheral country.

The RF is more widely deployed in Spain than in Mexico. The differences in the adoption of RF between the two countries stem from the availability of programs for suppliers at different supply levels, their efficient implementation and a robust regulatory framework, but especially from the cooperative approach adopted. The motives and enablers of RF adoption in the automobile industry can be explained under a framework of different supply chain management models. The RF programs driven by self-interest financial motives are characterized by an asymmetric distribution of benefits among supply chain participants. The RF programs that combine self-interest with cooperative motives are partially characterized by balanced benefits. In addition, they favor involvement practices and strengthen long-term relationships among supply chain participants. In this cooperative approach, trust, transparency and especially sharing information are considered relevant enablers. Finally, the specific automobile industry's features that determine RF adoption are linked to the structure and governance mode of the supply chain. The structure in terms of length – multiple supply levels – conditions the design of RF programs based on the buyer's position in the supply chain. The governance mode, particularly how the relationships are established, conditions the factors and requisites for efficient adoption of the RF programs.

This research analyzes the RF framed in the dynamics of buyer–supplier relationships and different models of supply chain management, allowing us to identify cooperation motives and their impact on RF adoption, beyond the traditional economic and financial motives highlighted by previous literature.