Risk control strategies for inventory pledge financing on cross-border e-commerce platforms empowered by the digital economy

Aolin Leng, Maolin Sun and Jinzhao Shi

Omega, 2025, vol. 133, issue C

Abstract: With the development of cross-border e-commerce (CBEC), CBEC-based inventory pledge financing (CBEC-based IPF) has gradually emerged, where exporters can apply for financing from cross-border e-commerce platforms (CBECPs) with their stocks in overseas warehouses. Due to the intensification of information asymmetry caused by overseas pledges and the impact of exchange rate fluctuations on repayments and settlements, such businesses face increased credit and market risks. Fortunately, the digital economy can empower CBECPs to achieve “post-loan risk management”, such as using big data technology to monitor exporters’ post-loan business activities on the platform and reduce their “credit default risk”, or utilizing online marketing technologies such as search engine optimization and homepage recommendations to promote the sales of exporters’ pledged goods and lower their “market sales risk”. We focus on risk control issues in the CBEC-based IPF under the empowerment of the digital economy. The pre-loan risk control measures consider the setting of the pledge rate, while the post-loan risk control measures towards credit and market risks consider, respectively, the platform's online credit supervision and product sales assistance for exporters in light of the digital economy. On the basis of considering exchange rate fluctuations, we use optimization method to build decision models of a CBECP under two scenarios, i.e., “only control pre-loan risk” and “joint control pre- and post-loan risk”, and find that compared to the former, the latter is more profitable for the CBECP, indicating that the digital economy can empower the CBECP to achieve more comprehensive risk control and improve economic benefits. Furthermore, in the case of the CBECP paying equal risk control cost, its optimal choices for credit and market risk control measures are provided. The results show that when and only when the market risk control is cheaper enough and the budget is limited, the CBECP chooses market risk control; otherwise, it always implements credit risk control. We also extend the model to study the case when the CBECP pays equal risk control level in the post-loan risk control, and conduct numerical experiments to verify the above conclusions. Our findings strongly suggest CBECPs to adopt the “joint pre- and post-loan risk control” in the CBEC-based IPF business, and provide them strategies for choosing between post-loan credit and market risk control measures.

Keywords: Digital economy; Cross-border e-commerce platform; Inventory pledge financing; Risk control (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1016/j.omega.2024.103251

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