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Supply chain green strategy considering manufacturers’ financial constraints: how to manage the risk of green supply chain financing

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Listed:
  • Zhixuan Lai

    (Shanghai Lixin University of Accounting and Finance)

  • Gaoxiang Lou

    (East China University of Science and Technology)

  • Linsen Yin

    (Shanghai Lixin University of Accounting and Finance)

  • Haicheng Ma

    (East China University of Science and Technology)

  • Xuechen Tu

    (East China University of Science and Technology)

Abstract

Supply chain members have a variety of green strategic choices in the context of manufacturer’ capital-constrained green supply chains. This paper investigates two types of single-dimensional suppliers’ green strategies (Combination of green practices and financing schemes): the green supply (GS) and green manufacturing (GM) strategies. The GS strategy implies that suppliers implement the GS practice independently; the GM strategy indicates that suppliers provide a green credit guarantee (GCG) to manufacturers to help them implement GM practices. In both green strategies, manufacturers need to solve their production capitals through bank credit financing (BCF). Comparing the GS and GM strategies, this paper aims to identify suppliers preferred green strategy. The results show that, compared to the benchmark case without any green strategy, the GS strategy can effectively improve suppliers’ profits, but the GM strategy cannot. Even if the unit investment cost of the GS practice is higher, suppliers will still implement this strategy when the GCG coefficient is high and manufacturer’s initial capital is low. Furthermore, this paper incorporates green marketing (GA) into GS and GM strategies, investigates two types of dual-dimensional supply chain green strategies (GS-with-GA and GM-with-GA), to analyze the advantages and disadvantages of the dual-dimensional green strategy and single-dimensional green strategy. The conclusions show that compared to the single-dimensional green strategy, the dual-dimensional green strategy can improve product greenness and supply chain efficiency, but it does not necessarily improve manufacturer’s profit, especially when both the demand uncertainty level and manufacturer’s initial capital are high. This paper contributes to the literature on operational risk management by guiding enterprises to develop operational and financing strategies to reduce potential operational and financing risks.

Suggested Citation

  • Zhixuan Lai & Gaoxiang Lou & Linsen Yin & Haicheng Ma & Xuechen Tu, 2025. "Supply chain green strategy considering manufacturers’ financial constraints: how to manage the risk of green supply chain financing," Annals of Operations Research, Springer, vol. 348(2), pages 1037-1068, May.
    • Handle: RePEc:spr:annopr:v:348:y:2025:i:2:d:10.1007_s10479-023-05239-z
    DOI: 10.1007/s10479-023-05239-z
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