Emission Reduction and Financing Decisions in Blockchain-Enabled Supply Chains Under Cross-Level Financing

This study investigates a multi-level supply chain subject to cap-and-trade regulation, involving a capital-constrained supplier, a manufacturer, and a retailer. Blockchain technology enhances trust among core firms, cross-level firms, and banks, thereby enabling financing for cross-level firms, and strengthening consumer trust in low-carbon products. This study explores the advance payment without blockchain technology (AN mode), and two blockchain-enabled financing modes: advance payment with cross-level financing (ACB mode) and advance payment with bank financing (ABB mode). First, both ABB and ACB modes reduce carbon emissions more than the AN mode, while which mode achieves greater total supply chain abatement depends on the bank interest rate and carbon abatement efficiency. Blockchain-enabled financing benefits all supply chain participants when blockchain operation costs are low, achieving win–win–win outcomes compared with the AN mode. These results remain robust even when carbon abatement efficiencies are heterogeneous. Second, when all supply chain participants adopt blockchain, an equilibrium emerges where the supplier, manufacturer, and retailer choose the same financing mode. Interestingly, when blockchain operation costs are low and carbon abatement efficiency is high, the ACB mode enables all participants to attain higher profits. Finally, when the supplier's initial capital and the retailer's interest rate are either low or high, the ACB mode is the supplier's optimal choice under blockchain technology. These findings provide managerial guidance for strategically selecting financing modes and adopting blockchain technology. The reliability of the conclusions is verified through sensitivity analyses.