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Financing and Cost Sharing for a Supply Chain Under CSR - Sensitive Demand

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  • Franck Moraux

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

  • D.A. Phan

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

  • Thi Le Hoa Vo

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

Abstract

Downstream firms nowadays adopt either financing or cost sharing (CS) mechanisms to enhance the corporate social responsibility (CSR) performance of their suppliers. In this paper, we are interested in combining these two mechanisms in a supply chain. We consider a supply chain where the demand is CSR-dependent and where a large retailer shares the costs of CSR activities undertaken by a SME supplier. We investigate how the retailer's choice of two financing mechanisms, namely Bank Financing (BF) and Reverse Factoring (RF), can influence the various operational decisions of both parties and the performance of the supply chain. Our findings demonstrate that no matter which financing mechanism is applied (BF or RF), CS leads to higher CSR effort and higher profits for all supply chain members. Moreover, a CS contract affects the financing preferences of both the retailer and the supplier. Managerially, a CS contract combined with an appropriate financing mechanism help to improve the CSR performance and the profitability of a supply chain. © 2021, IFIP International Federation for Information Processing.

Suggested Citation

  • Franck Moraux & D.A. Phan & Thi Le Hoa Vo, 2021. "Financing and Cost Sharing for a Supply Chain Under CSR - Sensitive Demand," Post-Print hal-03373718, HAL.
    • Handle: RePEc:hal:journl:hal-03373718
    DOI: 10.1007/978-3-030-85906-0_16
    Note: View the original document on HAL open archive server: https://hal.science/hal-03373718
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    References listed on IDEAS

    as
    1. Klapper, Leora, 2006. "The role of factoring for financing small and medium enterprises," Journal of Banking & Finance, Elsevier, vol. 30(11), pages 3111-3130, November.
    2. Ghosh, Debabrata & Shah, Janat, 2015. "Supply chain analysis under green sensitive consumer demand and cost sharing contract," International Journal of Production Economics, Elsevier, vol. 164(C), pages 319-329.
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    Keywords

    Bank financing; Corporate social responsibility; Cost-sharing contract; Reverse factoring; Supply chain;
    All these keywords.

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