Platform financing and CSR performance in an E-commerce marketplace

Abstract

PurposeThis paper investigates whether and how the financial services offered by an e-commerce platform can help budget-constrained small- and medium-sized suppliers improve their corporate social responsibility (CSR) performance.Design/methodology/approachThe authors examine a supply chain in which a budget-constrained supplier engages in CSR, produces a finished product and sells it on the marketplace of an e-commerce platform. This platform offers financial services to the supplier, choosing among three types of financing models: target rate of return, credit limit and CSR-linked financing. Using a Stackelberg game approach, the authors can drive the equilibrium decisions under each financing model.FindingsThe results reveal that all three financing models help improve the supplier's CSR investment as long as consumer sensitivity toward CSR exists. Moreover, the last one leads to the highest profitability of the overall supply chain and each member.Originality/valueThe findings shed light on the role of platform financing and how to design the most appropriate financing model to improve CSR for supply chain managers.