The combined decisions of inventory financing and insurance under the risk of coal loss
WANG Wenli
CHANG Jing
Abstract：Affected by the national coal capacity reduction policy and the tightening of credit policy of financial institutions,the financing environment of coal enterprises is sluggish,and the uncertainty of coal inventory mortgage loss has greatly reduced the confidence of banks in lending.The bank's risk of inventory financing can be reduced by insurance.In this paper,an innovative financing mode is put forward with inventory and insurance policy as pledge.Under this mode,the impact of insurance premium,the firm's initial capital,profit rate and the bank's risk control parameters on capital-constrained firm's optimal production and insurance combined decisions are studied.It is shown that the risk-averse bank will set loan limit to control his risk and this limit can be enhanced by buying insurance under a certain condition.When the firm's profit rate or the bank's target non-performing loans(NPL)ratio is not too high,the firm should buy insurance only if his initial capital is more than a certain multiple of fixed premium.When the firm'sprofit rate or the bank's target NPL ratio is high,the firm should also buy insurance if only the firm's capital shortage for fixed premium is less than a certain threshold.
Keywords：coal losscapital constraintsinventory financinginsurancecombined decisionscoal enterprise
Publication Date：2025-04-28
Online Publishing Date：2025-08-15(First online date of this platform, not the publication date of the document)
Pages：9( 135-143 )