Design of Blockchain and Strategic Financing Service under the Platform Economy

Jianghua Wu, Xin Wang and Yuhong He

Omega, 2025, vol. 131, issue C

Abstract: The capital constrains and uncertainties in supply disruptions faced by small and medium-sized suppliers pose critical challenges for the development of e-commerce platforms. In response, platforms have begun offering direct financing (PDF) to their suppliers alongside traditional bank credit financing (BCF). Within the private (consortium) blockchain, the platform and the supplier (and the bank) achieve consensus on financial smart contract, enabling the execution of flexible contracts tailored to suppliers’ risk profile. We develop a game-theoretic model to examine the terms of smart contracts in different blockchains and further investigate the platform's optimal blockchain design. We find that PDF serves to safeguard the platform's commission income from high-interest BCF. Our analysis reveals that PDF is more likely to be provided to a risky supplier within the consortium blockchain, contrasting with outcomes observed within the private blockchain. As a result, the platform and the supplier could reach win-win, or win-lose outcomes within the private blockchain; while within the consortium blockchain, they tend to result in win-win or lose-win outcomes. Such incentive conflict could potentially hinder blockchain adoption. Our findings further provide the managerial insights guiding the platform's blockchain design: adopting consortium blockchain under moderate market potential and low or high supplier's risk, and adopting private blockchain otherwise. Furthermore, we consider the supplier's endogenous effort on reducing risk, and numerically demonstrate that blockchain may encourage or discourage the supplier's effort. Our research complements previous studies by investigating the interaction between the PDF provision and blockchain structures under uncertain supply disruption risk.

Keywords: Supply chain finance; Platform direct financing; Private blockchain; Consortium blockchain; Supply disruption (search for similar items in EconPapers)
Date: 2025
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0305048324001658
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jomega:v:131:y:2025:i:c:s0305048324001658

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
https://shop.elsevie ... _01_ooc_1&version=01

DOI: 10.1016/j.omega.2024.103200

Access Statistics for this article

Omega is currently edited by B. Lev

More articles in Omega from Elsevier
Bibliographic data for series maintained by Catherine Liu ().