The Impact of Data Federation Technology on Supply Chain Financing Based on Dynamic Evolutionary Game Analysis

The Impact of Data Federation Technology on Supply Chain Financing Based on Dynamic Evolutionary Game Analysis

Huijun Tang
DOI: 10.4018/IJISSCM.346376
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Abstract

Digital technology has been applied in supply chain financing(SCF), which ensures small and medium-sized enterprises (SMEs) have significantly better access to get loans. Digital SCF is established on the basis that financing companies need to provide global data to the financial service providers. However, some enterprises may be unwilling to share information for financing suppliers due to data security which affects the development of such new SCF pattern. In this paper, we propose a solution scheme based on data federation technology and evaluate the feasibility of data federation technology in SCF by dynamic evolutionary game analysis. A trustworthy financing service model is established based on data federation technology and the model highlights the characteristic of data availability but invisibility. Evolutionary simulation analysis was conducted on factors that affect data federation technology applied in SCF. The findings indicate that SMEs can get effective financial services if we use data federation technology to enhance the mutual data trust between the two parties.
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Supply Chain Financing

The practical and theoretical research on SCF can be summarized as the evolution from financial orientation and supply chain orientation to digital technology orientation. Financial oriented SCF is mainly carried out by financial institutions which do not fully participate in the supply chain process. Accounts receivable financing (Lu et al., 2020; Gelsomino et al., 2016), inventory financing (Moritz et al., 2010; Hua et al., 2021), and advance payment financing are the main methods for implementing this SCF type (Hofmann & Kotzab, 2010). However, there is a certain degree of information asymmetry between financial institutions and supply chain enterprises, which may cause certain risk management problems, such as incomplete trade data or financing fraud (Martin & Hofmann,2017)

Supply chain oriented SCF is mainly carried out by the core enterprise in the supply chain. As the center of mastering upstream and downstream data, core enterprises can collaborate with financial institutions to provide certain financial services to their upstream and downstream (Frankel et al., 2020; Song et al., 2019). In this mode, once the core enterprise encounters problems, the operation of SCF faces great risks (Saeed et al., 2022; Liu et al., 2022). In order to undertake risk commonly, more and more financial institutions, core enterprises, third-party technology companies, supply chain service providers and other market entities are participating in such SCF mode, forming diversified supply chain financial products and services (Song et al., 2018; Zhi et al., 2022).

With the development of digitalization and Internet technology, SCF has gradually developed towards digitalization (Choi et al., 2018), intelligence (Fairchild, 2005), and platform (Ma et al., 2020), which can greatly improve the transparency of SCF. Based on digital technology, SCF enables financial institutions to participate in supply chain processes, making financial decisions more precise and significantly reducing financial risks under global data support (Salampasis et al., 2014). Research on digital oriented SCF has emerged and advanced.

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