The Optimal Financing Decisions of Capital-Constrained Manufacturers under Different Power Structures

Nan Xie, Zicong Duan and Haitao He ()
Additional contact information
Nan Xie: Hunan Provincial Key Laboratory of Big Data Mining and Application for Macro-Economy, School of Business, Hunan Normal University, Changsha 410081, China
Zicong Duan: Hunan Provincial Key Laboratory of Big Data Mining and Application for Macro-Economy, School of Business, Hunan Normal University, Changsha 410081, China
Haitao He: School of Business, Central South University, Changsha 410083, China

Mathematics, 2024, vol. 12, issue 16, 1-26

Abstract: This paper investigates the optimal financing decisions of capital-constrained manufacturers under different power structures. Using a Stackelberg game model, it analyzes the optimal equilibrium operational decisions of capital-constrained manufacturers at varying levels of internal capital. The study finds that, compared to a power structure dominated by eco-innovative enterprises, a power structure led by ordinary enterprises enhances the level of eco-innovation of innovative products and the overall profitability of the supply chain. When eco-innovative enterprises are well-capitalized, internal financing has lower costs but may lead to idle funds, while bank financing and mixed financing have higher costs but make full use of available capital. When eco-innovative enterprises are undercapitalized, mixed financing is the optimal choice. The research employs numerical simulations to analyze the impacts of consumer environmental awareness, innovation investment costs, and production costs on the level of eco-innovation in products, manufacturers’ profits, and the overall profitability of the supply chain, providing decision-making references for governments and enterprises.

Keywords: financial constraint; power structure; supply chain finance; innovation management; Stackelberg model (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2227-7390/12/16/2489/pdf (application/pdf)
https://www.mdpi.com/2227-7390/12/16/2489/ (text/html)

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:gam:jmathe:v:12:y:2024:i:16:p:2489-:d:1454816

Access Statistics for this article

Mathematics is currently edited by Ms. Emma He

More articles in Mathematics from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().