Abstract: In the context of low-carbon transition of global supply chains, financial constraints have become an obstacle to the development of remanufacturing business of home country manufacturers. In this paper, a two-level supply chain model consisting of a financially constrained home country manufacturer and a host country retailer is constructed to address the remanufacturing decision and the choice of financing strategy of the manufacturer in a cross-border closed-loop supply chain. By analyzing the equilibrium results under two financing strategies, namely bank loans and prepayment, we investigate the impacts of the remanufacturing decision of the home country manufacturer as well as the prepayment interest rate and cross-border recovery cost on the optimal financing strategies of the supply chain members. The study finds that： (1) Manufacturers’ remanufacturing decisions can be categorized into no remanufacturing, partial remanufacturing and full remanufacturing, and lower cross-border recycling costs and higher production cost differentials promote remanufacturing activities. (2) When the prepayment rate is above a certain threshold, manufacturers will choose retailer prepayment financing regardless of the remanufacturing equilibrium decision. When the cross-border recovery cost is below a certain threshold, manufacturers prefer retailer prepayment financing in most cases. This paper provides a theoretical basis for cross-border closed-loop supply chain enterprises to introduce remanufacturing decision and financing strategy at the same time, which is of great reference significance for sustainable development.

Key words: cross-border supply chain, remanufacturing, financing strategies, capital constraints, supply chain management