Optimal Financing Strategy in a Capital-Constrained Supply Chain with Retailer Green Marketing Efforts

Xiaoli Zhang, Guoyi Xiu, Fakhar Shahzad and Yupeng Duan
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Xiaoli Zhang: School of Economics and Management, Harbin University of Science and Technology, Harbin 150080, China
Guoyi Xiu: School of Economics and Management, Harbin University of Science and Technology, Harbin 150080, China
Yupeng Duan: Department of Statistics and Applied Probability, University of California, Santa Barbara, CA 93106, USA

Sustainability, 2021, vol. 13, issue 3, 1-19

Abstract: The purpose of this research is to examine the green supply chain (GSC) financing decisions of manufacturers and capital-constrained retailers in order to establish a Stackelberg game model under decentralized and centralized decision-making. This paper studies the influence of retailers’ choice of trade credit or bank loan financing strategy on a GSC’s performance and analyzes their decision-making tendency. The results show that manufacturers should provide trade credit and participate in retailers’ financing decisions to avoid double marginal effects under both centralized and decentralized decision-making. Interestingly, the optimal value of green marketing effort and retailer order quantity was twice as high as the decentralized under the centralized decision, indicating that the centralized decision could better improve GSC’s financing efficiency. Especially when the trade credit financing strategy is feasible, this effect is more significant. Finally, the outcomes are verified through numerical simulation, which references GSC practitioners in management decisions.

Keywords: green supply chain; capital constraint; trade credit; bank loan; financing strategy (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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