Financing and online recycling channel decisions in a closed-loop supply chain

In the context of “Internet + recycling”, remanufacturing enterprises seek cooperation with recycling platforms to develop online recycling channels. Given that many manufacturers have capital constraints in the recycling and production process, we consider bank and recycling platform to provide financial assistance to the manufacturer. This paper constructs a Stackelberg game model under bank financing and recycling platform financing based on two forms of online recycling cooperation: entrusted recycling and direct recycling. Through the comparison of equilibrium profits, the participants’ financing and recycling channel preferences are explored. The results show that the recycling platform is willing to provide financing service for the manufacturer with a larger capital gap, but there are feasibility conditions for the setting of its loan interest rate. The manufacturer with less initial capital tends to choose the financing scheme with a relatively low interest rate, while the reduction of capital gap increases the propensity for bank financing. The lower platform commission prompts the manufacturer to implement direct recycling, and the increase in cost saving rate of remanufacturing and platform interest rate makes the superiority of direct recycling even more significant. However, entrusted recycling is always more profitable for the recycling platform regardless of the financing scheme. Furthermore, differentiated product sales and portfolio financing can have a certain impact on the manufacturer’s financing and recycling decisions.