Risk Transmission in Low-Carbon Supply Chains Considering Corporate Risk Aversion

Tingqiang Chen, Ruirui Zhu and Lei Wang ()
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Tingqiang Chen: School of Economics and Management, Nanjing Tech University, Nanjing 211816, China
Ruirui Zhu: School of Economics and Management, Nanjing Tech University, Nanjing 211816, China
Lei Wang: School of Economics and Management, Nanjing Tech University, Nanjing 211816, China

Mathematics, 2024, vol. 12, issue 13, 1-28

Abstract: In order to study the impact of risk aversion characteristics of enterprises on supply chain risk transmission, the risk aversion utility function is introduced, and the risk elasticity coefficient is used to construct a supplier-dominated low-carbon supply chain risk transmission model. Simulation analysis is conducted to investigate the transmission of emission reduction and revenue risks caused by internal and external contingent risk factors. The study reveals that under conditions of market demand uncertainty, the risk transmission effect is unaffected by the risk aversion characteristics of members in the low-carbon supply chain. While the risk-aversion characteristics of suppliers can decrease their own profit risk, they have a negative effect on the profit risk of manufacturers and the emission reduction risk of supply chain nodes. There exists a critical threshold for the impact of the risk-aversion degree of suppliers on their own emission reduction risk transmission effect. When this threshold is exceeded, the emission reduction risk decreases with increasing risk aversion intensity of suppliers, and vice versa. The risk aversion characteristics of manufacturers can weaken the negative effect of supplier risk aversion on the fluctuation risk of manufacturer profits, but they exacerbate the emission reduction risk transmission effect of manufacturers under asymmetric information influence. The findings have important theoretical and practical implications for supply chain risk management.

Keywords: risk aversion; supply chain risk; risk elasticity coefficient; risk transmission; carbon reduction (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2024
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