Collaborative financing and supply chain coordination for corporate social responsibility

Franck Moraux (), Dinh Anh 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
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: Recent research in supply chain (SC) management shows that collaborative financing and coordination can separately improve the SC's corporate social responsibility (CSR). This article examines how reverse factoring (RF) and cost-sharing (CS) contracts initiated by sizable creditworthy retailers interact and can help SCs address various challenges posed by CSR, especially for small-and medium-sized suppliers with limited working capital. RF can simultaneously lead to greater CSR effort and higher profits for all SC members compared to traditional bank financing. We highlight, nevertheless, how some factors, such as market demand uncertainty, the interest rate premia charged by the respective banks, and the supplier's or retailer's bankruptcy risks, determine the adoption and the benefits of the financing devices. Our managerial implications indicate that combining collaborative financing and coordination can simultaneously be profitable for all members of the SC and incentivize the supplier to raise the CSR efforts. Specifically, a CS contract associated with an appropriate financing mechanism can help to improve CSR and the SC's profitability.

Keywords: Corporate social responsibility; Collaborative financing; Reverse factoring; Supply chain coordination (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-cfn
Note: View the original document on HAL open archive server: https://hal.science/hal-03973871
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Published in Economic Modelling, 2023, 121, pp.106198. ⟨10.1016/j.econmod.2023.106198⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03973871

DOI: 10.1016/j.econmod.2023.106198

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