Retailers' risk attitudes and the value of cooperation in supply chain finance under investment-loan linkage financing

Xin Li, Yanhua Zhou, Dexiang Mei and Hui Yu

International Review of Financial Analysis, 2025, vol. 102, issue C

Abstract: Investment-loan linkage financing significantly reduces financial risks in supply chain finance through information collaboration between equity investment institutions and commercial banks. In the digital transformation era, this financing model provides integrated solutions for high-growth enterprises, such as retail technology firms (JD Daojia) and platform-based e-commerce companies (Pinduoduo). This paper develops a retailer investment-loan linkage financing model to capture banks' risk aversion and retailers' risk appetite while examining how information sharing alleviates information asymmetry in retailer financing. The findings suggest that sharing risk information improves Pareto efficiency across the supply chain, enhancing returns for equity investment institutions and commercial banks. Compared to the non-cooperative model, this information-sharing framework effectively reduces retailers' adverse selection behavior and enhances the accuracy of banks' financing decisions. This study offers a theoretical foundation for commercial banks' credit rating and pricing mechanisms and guides financial regulators to promote investment-loan linkage policies. Additionally, the results offer insights for government decision-making regarding targeted loan interest subsidies and guarantees, thereby optimizing retailers' financing environments and improving supply chain finance efficiency.

Keywords: Cooperative value; Investment-loan linkage; Risk attitude; Supply chain operation (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:102:y:2025:i:c:s1057521925001723

DOI: 10.1016/j.irfa.2025.104085

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