Supply Chain Finance in China: Business Innovation and Theory Development

Liu, Xiaohong; Zhou, Liguo; Wu, Yuheng

doi:10.3390/su71114689

Cited by 40 publications

(49 citation statements)

References 44 publications

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“…Cressy et al [14], Meyer [15], Bernanke [16] and Liu et al [17] show, using empirical banking data, that the main way to resolve the problem of a firm's financial constraint is using a bank loan as an external financing method while providing their assets to the bank as collateral. However, small and medium-sized firms have difficulty obtaining bank loans directly due to a lack of credit history or collateral, or even low creditworthiness.…”

Section: Literature Reviewmentioning

confidence: 99%

Impact of Loss-Aversion on a Financially-Constrained Supply Chain

Lee¹

2019

Sustainability

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Traditionally, in the area of production and operations management, the financial states and decision-makers’ behaviour regarding loss have been ignored in the supply chain, which may lead to infeasible or unrealistic practices or even catastrophic losses in practical supply chain operations. Therefore, this study aims to provide a model for operational efficiency in a financially constrained supply-chain system consisting of a financially deficient retailer, a supplier, and a bank, and to analyse the impact of the behaviour of the bank and the supplier on the operational decision. It is assumed that the bank provides a loan to the retailer considering the supplier’s credit guarantee for the retailer. The supplier’s credit guarantee implies that, if the retailer goes bankrupt after the sales season, then a pre-guaranteed proportion of the retailer’s loan is repaid by the supplier. Moreover, to capture the decision-makers’ behaviour regarding loss, it is assumed that the supplier and the bank are loss-averse in their risk preference on the final profit. Under this circumstance, it is intended to draw the theoretical implications by analysing a loss-averse behaviour model for a supplier and a bank, in which a kinked piecewise linear and concave utility function is considered. The optimal decision is analytically derived for the retailer (the optimal order quantity), the supplier (the optimal wholesale price), and the bank (the optimal interest rate). In addition, a sensitivity analysis is conducted to investigate how the model parameters affect the optimal decision for the retailer, the supplier, and the bank under different degrees of loss-aversion. The optimal decisions are shown to be highly affected by the degree of the loss-aversion coefficient of the bank and the supplier and to be more conservative than the result in the traditional case which optimises the risk-neutral expected profit (the unit degree of loss-aversion). The analytical results can be summarised as follows. First, as the wholesale price and the interest rate increase, the optimal order quantity decreases. Second, the more loss-averse the supplier is, the higher the optimal wholesale price that is offered to the retailer by the supplier. Third, the larger the credit guarantee that is provided to the retailer by the supplier, the higher the optimal wholesale price that is provided to the retailer. Fourth, the more loss-averse the bank is, the higher the interest rate that is offered to the retailer; and the larger the credit guarantee that is provided by the supplier, the lower the interest rate that is offered to the retailer.

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Section: Literature Reviewmentioning

confidence: 99%

Impact of Loss-Aversion on a Financially-Constrained Supply Chain

Lee¹

2019

Sustainability

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“…SCF is concerned with the capital flows within a supply chain, an area that has often been neglected in the past. Nevertheless, SCF does have an impact on a firm's capability for adopting sustainable supply chain management (SCM) practices (for further details, see [14] Liu et al (2015)).…”

Section: Definition Of Supply Chain Financementioning

confidence: 99%

Financial Credit Risk Evaluation Based on Core Enterprise Supply Chains

2018

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Supply chain finance has broken through traditional credit modes and advanced rapidly as a creative financial business discipline. Core enterprises have played a critical role in the credit enhancement of supply chain finance. Through the analysis of core enterprise credit risks in supply chain finance, by means of a ‘fuzzy analytical hierarchy process’ (FAHP), the paper constructs a supply chain financial credit risk evaluation system, making quantitative measurements and evaluation of core enterprise credit risk. This enables enterprises to take measures to control credit risk, thereby promoting the healthy development of supply chain finance. The examination of core enterprise supply chains suggests that a unified information file should be collected based on the core enterprise, including the operating conditions, asset status, industry status, credit record, effective information to the database, collecting related data upstream and downstream of the archives around the core enterprise, developing a data information system, electronic data information, and updating the database accurately using the latest information that might be available. Moreover, supply chain finance and modern information technology should be integrated to establish the sharing of information resources and realize the exchange of information flows, capital flows, and logistics between banks. This should reduce a variety of risks and improve the efficiency and effectiveness of supply chain finance.

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“…Supply chain finance does have an impact on a firm's capability to adopt sustainable supply chain management practices [1]. Over the years, the supply chain has been studied by many researchers [2,3].…”

Section: Motivationmentioning

confidence: 99%

Optimal Financing Decisions of Two Cash-Constrained Supply Chains with Complementary Products

Chen

Xin

2016

Sustainability

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Abstract:In recent years; financing difficulties have been obsessed small and medium enterprises (SMEs); especially emerging SMEs. Inter-members' joint financing within a supply chain is one of solutions for SMEs. How about members' joint financing of inter-supply chains? In order to answer the question, we firstly employ the Stackelberg game to propose three kinds of financing decision models of two cash-constrained supply chains with complementary products. Secondly, we analyze qualitatively these models and find the joint financing decision of the two supply chains is the most optimal one. Lastly, we conduct some numerical simulations not only to illustrate above results but also to find that the larger are cross-price sensitivity coefficients; the higher is the motivation for participants to make joint financing decisions; and the more are profits for them to gain.

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Supply Chain Finance in China: Business Innovation and Theory Development

Cited by 40 publications

References 44 publications

Impact of Loss-Aversion on a Financially-Constrained Supply Chain

Impact of Loss-Aversion on a Financially-Constrained Supply Chain

Financial Credit Risk Evaluation Based on Core Enterprise Supply Chains

Optimal Financing Decisions of Two Cash-Constrained Supply Chains with Complementary Products

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