Financing and Cost Sharing for a Supply Chain Under CSR - Sensitive Demand

Franck Moraux (), D.A. Phan and Thi Le Hoa Vo ()
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Franck Moraux: CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique
D.A. Phan: CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique
Thi Le Hoa Vo: CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique

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Abstract: Downstream firms nowadays adopt either financing or cost sharing (CS) mechanisms to enhance the corporate social responsibility (CSR) performance of their suppliers. In this paper, we are interested in combining these two mechanisms in a supply chain. We consider a supply chain where the demand is CSR-dependent and where a large retailer shares the costs of CSR activities undertaken by a SME supplier. We investigate how the retailer's choice of two financing mechanisms, namely Bank Financing (BF) and Reverse Factoring (RF), can influence the various operational decisions of both parties and the performance of the supply chain. Our findings demonstrate that no matter which financing mechanism is applied (BF or RF), CS leads to higher CSR effort and higher profits for all supply chain members. Moreover, a CS contract affects the financing preferences of both the retailer and the supplier. Managerially, a CS contract combined with an appropriate financing mechanism help to improve the CSR performance and the profitability of a supply chain. © 2021, IFIP International Federation for Information Processing.

Keywords: Bank financing; Corporate social responsibility; Cost-sharing contract; Reverse factoring; Supply chain (search for similar items in EconPapers)
Date: 2021-09-05
New Economics Papers: this item is included in nep-cfn
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Published in IFIP International Conference on Advances in Production Management Systems (APMS 2021), Sep 2021, Nantes, France. pp.139-148, ⟨10.1007/978-3-030-85906-0_16⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03373718

DOI: 10.1007/978-3-030-85906-0_16

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