Sustainable supply chain finance through digital platforms: a pathway to green entrepreneurship

Reza-Gharehbagh, Raziyeh; Asian, Sobhan; Hafezalkotob, Ashkan; Makui, Ahmad

doi:10.26181/19561606.v3

Sustainable supply chain finance through digital platforms: a pathway to green entrepreneurship

Version 3 2024-07-12, 02:03

Version 2 2022-07-13, 04:12

Version 1 2022-07-07, 00:21

journal contribution

posted on 2024-07-12, 02:03 authored by Raziyeh Reza-Gharehbagh, Sobhan AsianSobhan Asian, Ashkan HafezalkotobAshkan Hafezalkotob, Ahmad Makui

Abstract: This paper studies the green new product development (GNPD) problem of a risk-averse capital constrained supply chain (SC). The SC is managed by an SME entrepreneur, seeking financial support from a multi-sided FinTech platform (MSP) to develop a portfolio of green and non-green products. The MSP offers the SC a combination of equity financing (EF) and debt financing (DF) facilities and must decide on the interest rate of its DF facility. Using a benchmark model, we first characterize the SC’s production and the MSP’s financing decisions under a deregulated scenario. Focusing on an alternative case with government intervention (i.e., hybrid environmental-green entrepreneurship policy), we next develop a three-level game theoretical model and sequentially characterize the decision-making behavior of government, MSP, and SC. The model outcomes are analyzed by considering the policy approach (i.e., economic influence vs. social welfare) and the platform’s risk attitude. The results reveal that, when coupled with an appropriate government intervention policy, a regulated scenario leads to a better outcome, particularly when the MSP is risk-neutral and strikes a right balance between the EF and DF. The win–win situation may not be realized when the MSP is risk-averse and the host government is merely focused on its economic influence. To successfully promote sustainable supply chain finance (SSCF) through digital platforms, policy makers are urged to leverage their legislative power and prioritize green entrepreneurship and social welfare over their financial maximization agenda.

Funding

Open Access funding enabled and organized by CAUL and its Member Institutions.

History

Publication Date

2022-04-08

Journal

Annals of Operations Research

Pagination

35p.

Publisher

Springer

ISSN

0254-5330

Rights Statement

© The Author(s) 2022. This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.