Abstract
Because of the risks existing in supply chain finance, taking accounts receivable factoring business as the research object, this paper uses the evolutionary game method to analyzes the factors affecting the decision-making of the participants in supply chain finance, constructs an evolutionary game model between small and medium-sized enterprises and financial institutions, and analyzes the mechanism of blockchain to solve the financial risks of the supply chain by comparing the changes of evolutionary stability strategies before and after the introduction of blockchain technology. This paper aims to reduce financing risks by analyzing the mechanism of blockchain technology in supply chain finance. It is found that, firstly, blockchain technology can reduce the credit risk of financial institutions and solve financing problem. Credit risk plays a decisive role in whether financial institutions accept financing business decisions. Blockchain technology can reduce the operational risk of financial institutions and improve the business income of financial institutions. Secondly, the strict regulatory environment formed by blockchain technology makes the default behavior of small and medium-sized enterprises and core enterprises in a high-risk state at all times. No matter the profit distribution proportion that small and medium-sized enterprises can obtain through collusion, they will not choose to default, which effectively solves the paradox that small and medium-sized enterprises cannot obtain loans from financial institutions despite the increased probability of compliance. Then, the evolutionary game between financial institutions and small and medium-sized enterprises is balanced in that financial institutions accept business applications, small and medium-sized enterprises abide by the contract, and the convergence effect is better. Therefore, blockchain technology not only reduces the financing risk of financial institutions but also helps to solve the financing problems of small and medium-sized enterprises.
Highlights
The increasing competition forces enterprises in the supply chain to establish business alliances based on the commonality of commodity flow, capital flow, and information flow, aiming to reduce costs and improve competitive strength [1]
If the small and medium-sized enterprises (SMEs) delivers the goods according to the contract, the factoring business is carried out normally, and the financial institution recovers the accounts receivable according to the factoring business at maturity, resulting in income (1 − k) R
We find the following main conclusions
Summary
The increasing competition forces enterprises in the supply chain to establish business alliances based on the commonality of commodity flow, capital flow, and information flow, aiming to reduce costs and improve competitive strength [1]. Most existing studies sort out the influencing factors of financing participants’ decision-making in a static way [28], ignoring the sequence between financial institutions’ credit investigation and their decision-making, and did not highlight the action mechanism of blockchain technology in the game process. This paper takes the accounts receivable factoring business as the research object, applies the evolutionary game analysis method, divides the default behavior of SMEs into two types: unilateral default and collusion with core enterprises, and analyzes the evolutionary stability strategy (ESS) between financial institutions and SMEs. By comparing the stability of the equilibrium strategy before and after introducing blockchain technology, this paper defines the main factors affecting the decision-making process and the mechanism that how blockchain technology makes the system stable by resolving risks.
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