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Blockchain-enabled supply chain finance model: a study of the dual-channel closed-loop supply chain of electronic products

Author

Listed:
  • Quanpeng Chen

    (Southwestern University of Finance and Economics
    Sichuan Vocational College of Finance and Economics)

  • Xiaogang Chen

    (Southwestern University of Finance and Economics)

  • Shu Li

    (Southwestern University of Finance and Economics
    Southwest University of Science and Technology)

  • Jun Chen

    (Auckland University of Technology)

Abstract

Small and medium enterprises (SMEs) in supply chains often struggle to obtain external financial resources from banks, due to their poor supply chain visibility. Prior studies suggest that adopting blockchain technology can enhance supply chain visibility, thus facilitating access to supply chain finance (SCF). In this study, we compare the traditional SCF mode with the blockchain-enabled SCF mode within the framework of a dual-channel closed-loop supply chain (CLSC). Our analysis incorporates both prepayment financing and accounts receivable financing or purchase order financing into the analytical model. Our main findings are as follows. Firstly, adopting blockchain technology leads to a reduction in the interest rate, enabling the manufacturer and the retailer to raise their buy-back prices. This increase in buy-back prices subsequently encourages greater recycling of used products. Secondly, in a context marked by high cross-price elasticity, we observe abrupt pricing fluctuations in both online and offline sales channels. However, adopting blockchain technology can effectively mitigates these fluctuations, thus ensuring the sustained stability of demand in both sales channels. Thirdly, in the blockchain-enabled mode, equilibrium wholesale price, offline sales price, manufacturer’s buy-back price, and retailer’s buy-back price are higher compared to those in the traditional mode. Conversely, the equilibrium direct sales price is lower in the blockchain-enabled mode than in the traditional mode. Fourthly, changes in interest rates and cross-price elasticity have analogous impacts on pricing dynamics in both the traditional and blockchain-enabled modes. Fifthly, adopting blockchain technology leads to an all-win outcome for participants in SCF arrangements only when the benefits of blockchain-enabled traceability and reduced interest rates outweigh the costs associated with hosting and access.

Suggested Citation

  • Quanpeng Chen & Xiaogang Chen & Shu Li & Jun Chen, 2024. "Blockchain-enabled supply chain finance model: a study of the dual-channel closed-loop supply chain of electronic products," Annals of Operations Research, Springer, vol. 343(1), pages 87-124, December.
    • Handle: RePEc:spr:annopr:v:343:y:2024:i:1:d:10.1007_s10479-024-06320-x
    DOI: 10.1007/s10479-024-06320-x
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    References listed on IDEAS

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