Impacts of financing mechanism and power structure on supply chains under cap-and-trade regulation

By Ruihong Tang, Lei Yang. 2020

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Abstract This paper develops a low-carbon supply chain consisting of a capital-constrained manufacturer and a capital-abundant retailer where bank loans and early payment are investigated. Under each power structure, there always exists a financing equilibrium, i.e., early payment. Compared with bank loans, early payment could produce lower carbon emissions and higher social welfare in the retailer-led power structure; but it damages environment and social welfare, and leads to the conflict between profitability and environmental goals in the manufacturer-led case. Finally, impacts of power structure on financing mechanism, carbon emissions, and performance are analyzed to provide more managerial implications.

Subfields: Management Information Systems, Renewable Energy, Sustainability and the Environment, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/29ea142f545f5444c06d502dc9661c4807b8d5aa