Evaluating Supply Chain Finance Instruments for SMEs: A Stackelberg Approach to Sustainable Supply Chains Under Government Support

Shilpy and Avadhesh Kumar ()
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Shilpy: Department of Management, Birla Institute of Technology and Science, Pilani 333031, India
Avadhesh Kumar: School of Advanced Sciences, VIT-AP University, Amaravati 522237, India

Sustainability, 2025, vol. 17, issue 15, 1-25

Abstract: This research aims to investigate financing decisions of capital-constrained small and medium-sized enterprise (SME) manufacturers and distributors under a Green Supply Chain (GSC) framework. By evaluating the impact of Supply Chain Finance (SCF) instruments, this study utilizes Stackelberg game model to explore a decentralized decision-making system. To our knowledge, this investigation represents the first exploration of game models that uniquely compares financing through trade credit, where the manufacturer offers zero-interest credit without discounts with reverse factoring, while also considering distributor’s efforts on sustainable marketing under the impact of supportive government policies. Our study suggests that manufacturers should adopt reverse factoring for optimal profits and actively participate in distributors’ financing decisions to address inefficiencies in decentralized systems. Furthermore, the distributor’s demand quantity, profits and sustainable marketing efforts show significant increase under reverse factoring, aided by favorable policies. Finally, the results are validated through Python 3.8.8 simulations in the Anaconda distribution, offering meaningful insights for policymakers and supply chain managers.

Keywords: green supply chain (GSC); supply chain finance (SCF); stackelberg game model; reverse factoring (RF); sustainable marketing; trade credit (TC) (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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