Research on Financing Strategies for Capital-Constrained Green Product Manufacturers Under Retailer Competition

Abstract

This paper investigates the financing strategies of capital-constrained green product manufacturers in the presence of retailer competition. Within a green supply chain featuring manufacturer production, this paper considers that green product manufacturers can alleviate capital constraints through three financing approaches: external financing, internal financing, and mixed external-internal financing. Three game models corresponding to the financing modes are established and solved by backward induction to identify manufacturers’ optimal financing strategies and relevant influencing factors. The results reveal that the manufacturer’s profit dominance among different financing models depends on financing interest rates. If the interest rate of external financing is higher than that of internal financing, the manufacturer achieves the highest profit under internal financing and the lowest profit under external financing. Conversely, the manufacturer’s profit reaches its maximum under external financing and minimum under internal financing. By contrast, the profit dominance of Retailer 1 and Retailer 2 across financing models is associated with the product competition intensity coefficient.