Capital structure and supply chain capacity investment

Hu, Qiaoyan

doi:10.1111/poms.13718

Cited by 4 publications

(2 citation statements)

References 42 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Considering the fierce competition in the banking industry, consistent with previous literature (Lee et al, 2022; Zhang & Lee, 2022), the bank is assumed to be in a perfectly competitive market and charges the interest rate at break even. In other words, the bank charges the 3PL an interest rate

{r}^B

such that the bank is indifferent to issuing the loan to the 3PL and earning a risk‐free rate

{r}_f

of return (Hu, 2022; Kouvelis & Zhao, 2012; Wang, Fan, & Yin, 2019). Therefore, we have the following competitive credit pricing equation in bank financing:

$$ k{x}^B{\left({r}^B\right)}^2\left(1+{r}_f\right)=\left(1-\delta \right)k{x}^B{\left({r}^B\right)}^2\left(1+{r}^B\right).

…”

Section: Modelmentioning

confidence: 99%

Third‐party logistics firm's technology investment and financing options in platform‐based supply chain with 4PL service

Bi,

Shen,

2024

Naval Research Logistics

View full text Add to dashboard Cite

In practice, capital‐constrained third‐party logistics (3PL) firms usually obtain bank financing (BF) to invest in logistics technology to enhance the consumer shopping experience. The emergence of financial innovation has prompted the adoption of alternative financing modes by 3PLs, including e‐commerce platform financing (EPF) and fourth‐party logistics financing (4PF). To clarify the differences among the three financing modes at the operational management level, we develop a Stackelberg game model to capture the strategic interactions between the 3PL and creditors. We examine a platform‐based supply chain where a manufacturer sells products through an e‐commerce platform to consumers, with the logistics services for the supply chain provided by the 3PL and fourth‐party logistics (4PL) firms. The analysis results reveal that the equilibrium interest rates under EPF and 4PF share a similar pattern regarding the logistics service cost coefficient, the commission rate, and the 4PL service fee. The difference is that under EPF (4PF), the logistics service level increases in the commission rate (4PL service fee) but decreases under the other financing strategy. Furthermore, the 3PL is inclined to invest in logistics technology only when the fixed investment cost is low, and these financing modes are complementary rather than alternative. The 3PL and manufacturer can benefit from 4PF (BF) when the logistics service cost coefficient is large and the market size is small (large); otherwise, EPF can enhance their profits. We also find that when the opportunity costs of capital are homogeneous, both the 4PL and the platform are consistently willing to act as financiers themselves. However, when considering heterogeneity in the opportunity costs of capital, they may be reluctant to provide financing. Each financing mode may achieve Pareto improvements under specific conditions. Finally, we also analyze the impact of technology R&D risks and endogenous 4PL service fee, yielding some valuable insights.

show abstract

{r}^B

such that the bank is indifferent to issuing the loan to the 3PL and earning a risk‐free rate

{r}_f

of return (Hu, 2022; Kouvelis & Zhao, 2012; Wang, Fan, & Yin, 2019). Therefore, we have the following competitive credit pricing equation in bank financing:

$$ k{x}^B{\left({r}^B\right)}^2\left(1+{r}_f\right)=\left(1-\delta \right)k{x}^B{\left({r}^B\right)}^2\left(1+{r}^B\right).

…”

Section: Modelmentioning

confidence: 99%

Third‐party logistics firm's technology investment and financing options in platform‐based supply chain with 4PL service

Bi,

Shen,

2024

Naval Research Logistics

View full text Add to dashboard Cite

show abstract

“…Capital structure plays a critical role which enables manufacturing firms address the dilemma of whether or not an optimal capital structure can be achieved (Hu, 2022). Hu, Yao and Zhou (2022) referenced that a firm necessities to fund its tasks and in doing as such, they should pick a specific blend of value and obligation which shapes a capital structure.…”

mentioning

confidence: 99%

First-Order Determinants of Capital Structure among Listed Manufacturing Companies in the United States of America

Salinger

2022

JOFA

View full text Add to dashboard Cite

Capital structure plays a critical role which enables manufacturing firms address the dilemma of whether or not an optimal capital structure can be achieved. The total capital of a firm is composed of both debt and equity which makes up firm’s capital structure. The capital structure of manufacturing firms is made up of a combination of internal financing and external financing of the firm. Internal financing composed of equity, preference share capital and shareholder's funds and external financing composed of long term debt and short term debt of the firm. Internal financing using profits as a source of capital for new investment rather than obtaining capital elsewhere distributed as dividends to firm's owners or other investors. External financing is the phrase used to describe funds that firms obtain from outside of the firm. The decade since the onset of the global financial crisis has brought about significant structural changes in the manufacturing sector in USA. This study thus sought to assess the first-order determinants of capital structure among listed manufacturing companies in the United States of America through literature based study methodology. The study found that the manufacturing industry in USA is an industry that dominates companies listed on the New York Stock Exchange, it can be seen from the number of companies listed on NYSE increasing every period. The companies not only required to produce products, but also must be able to manage their capital structure. The study established that the first order determinants of capital structure for listed manufacturing firms in USA consist of financial situation, growth opportunities, size of the firm, product uniqueness, business risk, tax shields, dividend Policy. Furthermore, the first order determinants of capital structure consist of firm size, tangibility, growth opportunities, the non-debt tax shield, the bankruptcy risk, profitability and risk. The study concludes that listed manufacturing firms with the highest asset liquidity may increase debt capacity only when the bond covenants impose restrictions on the disposition of assets. The fact that a company possesses fixed assets to a large extent can be considered by its creditors as a guarantee that will allow them to recover their funds in the case of financial distress experienced by the borrower corporation. If a high-risk company is experiencing a decline in sales, the resulting profit will decrease due to the amount of the fixed costs. Because there is a decrease in profits, the company is not available enough funds to pay off the debt and interest so that it threatens the occurrence of bankruptcy. Keywords: First order determinants, capital structure, listed manufacturing companies, USA.

show abstract

Optimal relation-specific investment, financing, and the supply chain capital structure under uncertainty

Li,

Zhang,

Wang

et al. 2025

International Review of Financial Analysis

View full text Add to dashboard Cite

Capital structure and supply chain capacity investment

Cited by 4 publications

References 42 publications

Third‐party logistics firm's technology investment and financing options in platform‐based supply chain with 4PL service

Third‐party logistics firm's technology investment and financing options in platform‐based supply chain with 4PL service

First-Order Determinants of Capital Structure among Listed Manufacturing Companies in the United States of America

Optimal relation-specific investment, financing, and the supply chain capital structure under uncertainty

Contact Info

Product

Resources

About