The Impacts of Regulations and Financial Development on the Operations of Supply Chains with Greenhouse Gas Emissions

Zhuang Xiao, Yixiang Tian and Zheng Yuan
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Zhuang Xiao: School of Management and Economics, University of Electronic Science and Technology of China, Chengdu 610054, China
Yixiang Tian: School of Management and Economics, University of Electronic Science and Technology of China, Chengdu 610054, China
Zheng Yuan: School of Management and Economics, University of Electronic Science and Technology of China, Chengdu 610054, China

IJERPH, 2018, vol. 15, issue 2, 1-18

Abstract: To establish a micro foundation to understand the impacts of greenhouse gas (GHG) emission regulations and financial development levels on firms’ GHG emissions, we build a two-stage dynamic game model to incorporate GHG emission regulations (in terms of an emission tax) and financial development (represented by the corresponding financing cost) into a two-echelon supply chain. With the subgame perfect equilibrium, we identify the conditions to determine whether an emission regulatory policy and/or financial development can affect GHG emissions in the supply chain. We also reveal the impacts of the strictness of GHG emission regulation, the financial development level, and the unit GHG emission rate on the operations of the supply chain and the corresponding profitability implications. Managerial insights are also discussed.

Keywords: greenhouse gas (GHG); GHG emission regulation; financial development; supply chain management (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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