Research On The Influence Of Trade Credit On The Firms' Price Strategies In A Supply Chain

Appropriate trade credit policy can help enterprises to obtain more revenue,is an important source of enterprise competitive advantage,become one of the important means of competition between enterprises in the supply chain.However,while providing trade credit policies,enterprises usually have to bear more default risks and costs,especially in developing countries with imperfect financial environment.Therefore,when making decisions,enterprises in the supply chain should re-examine the benefits and risks brought by trade credit policies and consider the impact of trade credit policies on their optimal decisions.The decision-making models of enterprises in the supply chain are mostly based on the assumptions of complete information and complete rationality.The information asymmetry and the behavior factors of enterprises are rarely considered.Therefore,this paper relaxes the assumptions of complete information and complete rationality in the existing researches,and mainly carries out the following research work.(1)Considering the asymmetry of capital yield information brought by trade credit,the pricing decisions of enterprises in the supply chain are discussed.Firstly,this paper discusses the pricing problem of enterprises in the supply chain under the condition of complete information and asymmetric information.Secondly,the decision and profit of members in the supply chain are compared and analyzed under the condition of complete information and asymmetric information.Finally,the paper discusses the influence of some key parameters such as interest cost and revenue rate of capital on the pricing decision and profit of enterprises in the trade credit supply chain.It is found that in the asymmetric information model,when the estimated value of the manufacturer is lower than the real value of the retailer's interest revenue,the wholesale price and retail price under the complete information are higher than the price under the asymmetric information.When the manufacturer's estimate of the retailer's revenue rate of capital is higher than the retailer's actual data,the wholesale and retail prices under complete information are lower than those under asymmetric information.When the manufacturer underestimates the revenue rate of capital,the retailer's profit in asymmetric information is higher than that in complete information.When the manufacturer overestimates the revenue rate of capital,the retailer's profit in the asymmetric information is higher than that in the complete information.When retailers' revenue rate on deferred funding are shared with manufacturers,they are always more profitable.(2)Considering the asymmetry of demand forecasting information,this paper discusses the pricing problem of retailers and manufacturers in the two-channel supply chain under the situation of different demand forecasting information sharing in the business credit model.Firstly,the pricing strategies of retailers and manufacturers in the supply chain are derived under three scenarios:no information sharing,information sharing and only retailer prediction.Secondly,the decisions and profits of both sides of the supply chain under the three scenarios are compared.Finally,the paper discusses how the parameters of trade credit and prediction error affect the pricing decision and profit of dual-channel supply chain.It is found that if the expected value of the joint prediction is less than that of the manufacturer and the retailer,the retail price and the wholesale price in the supply chain under the information sharing model are the lowest among the three scenarios.When the market share of the retail channel is small,trade credit terms can make both parties profitable and thus create a win-win situation.However,when the retail channel market share is large,trade credit will not enable the member enterprises to achieve a win-win situation.If the market change is small and relatively stable,the retailer will choose no information sharing,and the manufacturer will choose information sharing.When market volatility is high,retailers and manufacturers in the supply chain will consistently select retailers to predict relevant demand information.If the retailer's prediction is large,the retailer is more inclined to the information sharing scenario,and the manufacturer is more inclined to the no information sharing scenario.If the manufacturer's prediction is large,the retailer is more likely to predict the no-information sharing scenario,and the manufacturer is more likely to predict the scenario only.(3)Considering the reciprocal preference behavior of the supply chain member enterprises,the pricing decision of the enterprises in the trade credit supply chain is discussed.Firstly,it constructs and analyzes the decision-making models of enterprises in the supply chain under three scenarios,namely,the model of no trade credit between the supplier and the retailer,the trade credit model of delayed payment provided by the supplier,and the model of reciprocal preference and the supplier providing trade credit to the retailer.Secondly,it compares and analyzes the price decision and profit of the members in the supply chain under three scenarios.Finally,the influence of reciprocity preference behavior,interest rate and other parameters on members' decision and profit in the supply chain is analyzed.It is found that in the trade credit model with the existence of reciprocity preference,the credit period in the supply chain is shortened with the increase of reciprocity preference coefficient.When consumers are more sensitive to credit period,the retail price in the supply chain decreases gradually with the manufacturer's reciprocal preference.When consumers are less sensitive to the credit period,the retail price in the supply chain gradually increases with the increase of manufacturers' reciprocal preference coefficient.Under trade credit,when the reciprocal preference coefficient of retailers is fixed,if consumers are more sensitive to the credit period,the retail price in the supply chain with reciprocal preference is lower than the price without reciprocal preference.If the consumer is less sensitive to the credit period,the retail price in the supply chain will be higher than the price in the scenario where the manufacturer has a reciprocal preference.When the reciprocal preference coefficient of the manufacturer is fixed,according to the conditions in the theorem,the comparison of retail prices in the supply chain with or without reciprocal preference can be further analyzed.(4)Based on the research results of the theoretical model,this paper analyzes the influence of trade credit on the pricing and profit of enterprises,and compares the influence of trade credit on the pricing and profit of retailers and suppliers under the information asymmetry and symmetry.The data of Chinese industrial enterprises from 2011 to 2013,the analysis data of Asia-pacific enterprises and the data of Wind listed companies are integrated to empirically calculate the enterprise's price cost markup,an important indicator that can reflect the enterprise's pricing strategy and profit,and test the impact of trade credit on the enterprise's price cost markup.It is found that trade credit significantly increases the price cost markup of enterprises.Further research shows that trade credit increases the supplier's price cost markup under competitive market structure.In addition,in the case of asymmetric information of suppliers,trade credit increases the supplier's price cost markup,but under information symmetry,trade credit does not affect the supplier's price cost markup.At the same time,under the condition of information asymmetry,trade credit weakens the retailer's price cost markup,but under the condition of information asymmetry,trade credit does not affect the retailer's price cost markup.