Abstract: In order to explore the choice of technology investment modes between the multinational manufacturer and the local supplier, a dual-sourcing supply chain model with the multinational manufacturer as the Stackelberg leader is constructed. Based on the game theory and KKT condition, the decision-making of supply chain members under the trade credit mode and the vertical merger and acquisition mode is studied, and the impacts of tariff and wholesale price of the local supplier on the decision-making equilibrium and the choice of technology investment modes are explored. The results are as follows. Under the trade credit mode, when the trade credit rate is low, the local supplier has a higher level of technology investment. Under the vertical merger and acquisition mode, when the profit allocation ratio is appropriate, there will be a Pareto improvement area between the multinational manufacturer and the local supplier, and the vertical merger and acquisition mode is better than the trade credit mode. When the tariff is high, the multinational manufacturer's profits decrease, but the multinational manufacturer and the local supplier are more likely to form the strategic alliance.

Key words: dual-sourcing supply chain, technology investment, trade credit, vertical merger and acquisition, tariff