Operation strategies of capital-constrained small and medium-sized enterprises based on blockchain technology

Abstract

Introduction: In reality, due to the low credit rating of small and medium-sized enterprises (SMEs), it is difficult for them to obtain sufficient financing from a single financier. This paper considers a dual-channel supply chain consisting of a capital-constrained manufacturer, an e-commerce platform (ECP), a third-party logistics company (3PL) and consumers. There are two innovations in this paper: the manufacturer obtains sufficient production funds through hybrid financing of the ECP and 3PL, and consumers want to know product information and compare prices. The contributions of this paper are to investigate new applications of blockchain in both hybrid financing and meeting consumer information search needs.Methodology: We discuss the operation and pricing decisions of supply chain in two scenarios. These two scenarios are without adopting blockchain (N) and with adopting blockchain (B). Then, we compare the equilibrium decisions in two scenarios.Results: The results show that the supply chain will adopt blockchain when certain conditions are met. The initial adoption of blockchain is bad for the ECP and 3PL. Further, we find that with the increase of financing ratio, the optimal financing interest rate of the ECP decreases, while the optimal financing interest rate of the 3PL increases.Discussion: The numerical analysis shows that the adoption of blockchain can be more profitable when the cost of information search is high.Management insights: In order to achieve supply chain coordination, the manufacturer should give subsidies the ECP and 3PL.