Who is the best insurance buyer? Financing the capital-constrained manufacturer with trade credit insurance
研究了制造商和保理商分别购买贸易信用保险的两种方案，发现当制造商资金高度受限时，两种保险方案都能提高零售商和制造商的利润，且制造商初始资金和单位生产成本影响各方对保险方案的选择。
Reverse factoring is a widely used finance solution for capital-constrained upstream enterprises. To effectively avoid the risk of unpaid debt, the integration of trade credit insurance (TCI) into factoring finance, encompassing reverse factoring, has gained increasing popularity. Motivated by the practice that both manufacturers and factors can act as TCI buyers, this study examines the decision analysis in two TCI schemes, i.e. the manufacturer-insured TCI (MI) and the factor-insured TCI (FI), on optimal decisions and profits of supply chain participants through game analysis. We find that when the manufacturer is highly capital-constrained, compared with the benchmark scenario without insurance, both MI and FI can generate higher profits for the retailer and the manufacturer. Through comparative analysis, we show that the manufacturer’s initial capital and unit production cost affect participants’ preferences in insurance options. Specifically, the retailer prefers MI if the unit production cost is high and prefers FI otherwise, and the factor chooses MI if the unit production cost is relatively low and the capital constraint is relatively high and prefers FI otherwise. Furthermore, FI scheme can achieve Pareto improvement for all participants if the manufacturer’s capital constraint is at a medium level.