ABSTRACT Small‐ and medium‐sized enterprises (SMEs) play a significant role in the socio‐economic framework and their production and operation management is one of the most major factors leading to resource waste, energy consumption, and environmental degradation, which has garnered considerable attention from governments around the world. The primary impediment to pollution control in SMEs is widely recognized as financial constraints, and effective supply chain management is essential to addressing this issue. This research explores heterogeneous green financing strategies for SMEs in supply chains, including reverse factoring (RF) and traditional bank credit ( BC ), under the government reward–penalty mechanism (RPM). By formulating game models over four scenarios, some intriguing results were derived: (1) Compared to BC , SMEs with higher environmental ratings and endorsement of core enterprise credits opt for RF, which simultaneously boosts both environmental and economic benefits. (2) The government indirectly regulates the pollution of SMEs via supply chain tools, enhancing the effects of green financing with a lower reward–penalty benchmark, while its choice of rewards or punishments impacts the pollution control system differently. (3) The RPM can broaden the scope and enhance the extent of RF's advantages. (4) The RPM and green financing have complementary effects in the pollution control of SMEs.
Zhang et al. (Fri,) studied this question.