Managing financing risk in capacity investment under green supply chain competition

Tao Wu, Li-Guo Zhang and Teng Ge

Technological Forecasting and Social Change, 2019, vol. 143, issue C, 37-44

Abstract: In this paper, we study the asymmetric duopoly models of competing supply chains with financing risk. The financing risk of the green supply chain's capacity investment could be available as complete or incomplete information to the traditional supply chain. By analyzing and comparing the optimal quantities, optimal prices, and optimal profits of both cases, we find that the financing risk of capacity investment does not affect either chain's choices of equilibrium quantities and prices in the complete information case. If this information is incomplete for the traditional supply chain, financing risk plays an important role in determining optimal quantities and optimal prices, together with the lending interest rate. To encourage the use of environmentally friendly technologies, government should use per-unit subsidies if the green supply chain suffers the cost disadvantage, and should encourage financial institutions to provide preferential loans to the green supply chain that suffers manufacturing or retailing capacity restrictions.

Keywords: Green supply chain; Asymmetric Cournot competition; Industry policy; Capacity restriction; Financing risk (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0040162518319425
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:tefoso:v:143:y:2019:i:c:p:37-44

DOI: 10.1016/j.techfore.2019.03.005

Access Statistics for this article

Technological Forecasting and Social Change is currently edited by Fred Phillips

More articles in Technological Forecasting and Social Change from Elsevier
Bibliographic data for series maintained by Catherine Liu ().