题目：Financing Through Advanced Selling: The Role of Social Ties

主讲人：S. Alex Yang，Associate Professor, London Business School, the United Kingdom

时间：2018年5月11日（周五）10:00-11:30 

地点：中欧平台武东路校区大楼114室

摘要：

Advance selling - the practice of selling a product in advance of its consumption date - has shown to be beneficial for a variety of operational reasons. More recently, start-up companies have been exploring the use of advance selling as a mechanism to help capital-constrained firms secure financing. This paper conducts a theoretical investigation into the efficacy of this alternative financing approach. In particular, we consider a financially constrained firm providing service in a local market. The firm may seek to raise the funds it requires through two channels, which may be used in conjunction: the traditional banking channel, or a group of established customers, to which the firm may advance sell its product at a discount. The firm chooses the initial price discount in order to maximize its expected profit, the consumers make forward-looking purchasing decisions in order to maximize their expected utility, and the bank chooses the break-even interest rate, if such a rate exists. The model reveals that the ability of advance selling to alleviate the firm's financial distress depends critically on the strength of “social ties" between its established consumers. In particular, we find that if consumers consider only their individual expected utility when deciding whether to advance purchase, the benefits of advance selling are completely offset by the negative impact of these sales on the firm's subsequent effort level. By contrast, as the social ties among consumers strengthen, their increased willingness-to-pay in advance renders advance selling beneficial. We additionally observe that the benefit of advance selling may be further enhanced by restricting the quantity of advance sales.

主讲人简介：

S. Alex Yang is an Associate Professor of Management Science and Operations at London Business School (on leave) and Associate Professor in the Faculty of Business and Economics at University of Hong Kong. Alex teaches the full time, part-time, and executive MBA, and executive education programs. He received his PhD and MBA for The University of Chicago Booth School of Business, and his Bachelor degree from Tsinghua University, China. Alex’s research focuses on supply chain finance (e.g., trade credit, factoring, credit insurance), managing operations under financial constraints (e.g., bankruptcy), supply chain management, and business analytics (e.g., risk management). His research has appeared in premier management and finance academic journals. Alex has working and consulting experience in companies including banks, supply chain finance start-ups, technology companies, hedge funds, and airlines.