Abstract
This paper investigates information leakage and financing simultaneously in a supply chain (SC) consisting of one capital-constrained supplier and two retailers with private demand-forecast signals. The supplier invests in corporate social responsibility (CSR) events and displays supply uncertainty. The supplier decides whether to leak information (L) or not (N). Additionally, the supplier has two financing strategies: bank credit financing (B) and trade credit financing (T). Thus, by combining the supplier’s information leakage and financing decisions, we formulated four possible strategies (i.e., NB, NT, LB, LT) and built a game analysis model to address the interaction of information leakage and financing decisions. We first provide the SC members’ optimal operational decisions (including the order quantity, the wholesale price and CSR effort level) under four strategies. Subsequently, we compare the profits of the suppliers and retailers under four strategies by combining analytical and numerical analysis. Several interesting results were found: (1) the supplier’s optimal wholesale price, CSR effort level, and profit under information leakage were higher than those under no information leakage; (2) the supplier’s financing decisions are dependent on the loan interest rate as low supply uncertainty and low supply correlation motivate the supplier to prefer choosing trade credit financing; and (3) finally, several interesting insights in managing SCs are provided.
Highlights
Published: 28 October 2021Information leakage and supply chain (SC) financing are two major issues in SC management that have been studied by researchers independently
Our work differs from the literature as we considered that the supplier is capital-constrained, and the two retailers form a Stackelberg game due to the supplier’s information leakage behavior
Zhang [8], Zhang et al [11], Qian et al [12], Wang et al [13], Huang et al [14], Liu et al [15], Wu et al [16], and Lu et al [17] further examined how the upstream firm’s information leakage behavior affects the incentive of information sharing under different pricing strategies and different operating strategies. They found that vertical information sharing cannot take place for free. Unlike these papers on vertical information sharing, our research further considers the upstream firm as being capital constrained and invests in her corporate social responsibility (CSR)
Summary
Information leakage and supply chain (SC) financing are two major issues in SC management that have been studied by researchers independently. HXEK faces an important question of how the capital-constrained supplier (HXEK) decides on financing strategy choice between bank credit financing and trade credit financing by considering its investments in CSR effort events Both supply and demand become more uncertain in the context of economic globalization. The contributions of this research are threefold: (1) this paper links two separate research issues for information leakage and SC financing by considering a SC with one capital-constrained upstream supplier and two competing downstream retailers; (2) the main findings of our work provide novel insight into investments into CSR effort activities; and (3) the results of this paper provide insights into the supplier’s optimal strategy choices and the retailers’ strategy preference between the four strategy choices for both information leakage and financing (i.e., strategy NB, NT, LB, and LT).
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