Financing and carbon emission reduction strategies of capital-constrained manufacturers in E-commerce supply chains

In this paper, a manufacturer is considered who is regulated by the cap-and-trade scheme and sells products on an e-business (EB) platform. When this manufacturer is capital-constrained, funds can be accessed via EB platform financing mode, supplier credit financing mode, and mixed financing mode, where the manufacturer accesses funds from both the supplier and the EB platform. Considering the exogenous retail price, this paper develops optimizing models under all three financing modes to investigate the manufacturer's emission reduction, production quantities, and financing strategies. The financing strategy of a slightly capital-constrained manufacturer depends on the usage fee charged by the EB platform. The manufacturer prefers non-financing support if the usage fee rate is too high; otherwise, the manufacturer prefers accessing funds from the EB platform. A moderately capital-constrained manufacturer prefers EB platform financing if the financing rate charged by the EB platform financing is slightly higher than that charged by the supplier. Also, a moderately capital-constrained manufacturer prefers EB platform financing if the usage fee rate is relatively low; otherwise, supplier credit financing is preferred. Furthermore, a heavily capital-constrained manufacturer prefers mixed financing if the financing rate charged by the EB platform is higher than that charged by the supplier; otherwise, the manufacturer prefers EB platform financing. When the usage fee is endogenous, the EB platform financing mode is better than the non-financing mode for both the capital-constrained manufacturer and the EB platform. Furthermore, the above conclusions are robust when the retail price is endogenous.

Automated summary

This study examines the financing strategies of a capital-constrained manufacturer on an e-business platform selling products, finding that the degree of capital constraint affects the choice between EB platform financing and supplier credit financing. The optimal choice of financing mode varies depending on the level of capital constraint, with preferences shifting based on factors such as usage fee rates and financing charges.