The coordination mechanism of supply chain finance based on block chain

Abstract

Recently, supply chain finance (SCF) through block chain platforms has gained its popularity. The modern supply chain has extremely extended, which leads to the nontransparency of the supply chain opacity, resulting in high cost of communication between upstream and downstream enterprises. In addition, the block chain, as the most ideal tool for rebuilding trust, can improve the enterprise’s ability to control the supply chain, making efficient and accurate product traceability become a reality. We study an SCF system based on block chain platforms over a single period. Suppose that the supplier faces a capital supply restrict and must borrow capital through an online block chain platform. The block chain platform avoid risks through set service rate, guarantee fee, loan fee for the loan. We find that the optimal strategy of the participants in the SCF system is stackelberg. For a SCF system with a capital-supply-restrict supplier, we find that the Block chain platform service rate provided to the suppliers is related to the Supplier default rate and the loan amount of Block chain platform service to the supplier. Our analysis suggests that it is important for the supplier to take the online block chain platform’s financial decisions (such as the service rate) into account when making their operational decisions.