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Optimal strategies for financing a three-level supply chain through blockchain platform finance

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  • Lu Liu
  • Yongjian Li
  • Tao Jiang

Abstract

The application of blockchain technology solves the trust problem between core enterprises (CEs), small and medium-sized enterprises (SMEs), and commercial banks, facilitating CEs and commercial banks to provide guarantee for SMEs and finance them, respectively. This study considers a three-level supply chain composed of a manufacturer, a distributor, and a capital-constrained retailer, and explores the operational strategies of blockchain platform finance (BPF), a supply chain finance mode enabled by blockchain technology. First, optimal decision solutions are obtained through decision and parameter sensitivity analyses. Second, by comparing the BPF and SME independent finance (SIF) modes, we obtain the applicable BPF mode conditions; for instance, when the retailer’s initial capital is low and the production cost is high, BPF is the better option for the manufacturer, distributor, and retailer compared to SIF. Third, we find that risk sharing improves the financing efficiency of the BPF mode. This study provides a theoretical basis for decision makers to implement blockchain supply chain finance at three levels: joint financing and operation decision-making, financing mode selection, and financing efficiency improvement.

Suggested Citation

  • Lu Liu & Yongjian Li & Tao Jiang, 2023. "Optimal strategies for financing a three-level supply chain through blockchain platform finance," International Journal of Production Research, Taylor & Francis Journals, vol. 61(11), pages 3564-3581, June.
    • Handle: RePEc:taf:tprsxx:v:61:y:2023:i:11:p:3564-3581
    DOI: 10.1080/00207543.2021.2001601
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    Cited by:

    1. Mandal, Prasenjit & Jain, Tarun, 2023. "When do competing retailers benefit from sourcing through an intermediary?," International Journal of Production Economics, Elsevier, vol. 266(C).
    2. Shujian Ma & Jilong Cai & Gang Wang & Xiangxiang Ge & Ying Teng & Hua Jiang, 2024. "Research on Decision Analysis with CVaR for Supply Chain Finance Based on Blockchain Technology," Mathematics, MDPI, vol. 12(3), pages 1-25, January.
    3. Manman Jiang & Liping Qin & Wenjin Zuo & Qiang Hu, 2024. "Emission Reduction Decisions in Blockchain-Enabled Low-Carbon Supply Chains under Different Power Structures," Mathematics, MDPI, vol. 12(5), pages 1-25, February.

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