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Managing financing risk in capacity investment under green supply chain competition

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  • Wu, Tao
  • Zhang, Li-Guo
  • Ge, Teng

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.

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  • Wu, Tao & Zhang, Li-Guo & Ge, Teng, 2019. "Managing financing risk in capacity investment under green supply chain competition," Technological Forecasting and Social Change, Elsevier, vol. 143(C), pages 37-44.
    • Handle: RePEc:eee:tefoso:v:143:y:2019:i:c:p:37-44
    DOI: 10.1016/j.techfore.2019.03.005
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    3. Haiyun, Cui & Zhixiong, Huang & Yüksel, Serhat & Dinçer, Hasan, 2021. "Analysis of the innovation strategies for green supply chain management in the energy industry using the QFD-based hybrid interval valued intuitionistic fuzzy decision approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 143(C).
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    7. Manavalan Ethirajan & Thanigai Arasu M & Jayakrishna Kandasamy & Vimal K.E.K & Simon Peter Nadeem & Anil Kumar, 2021. "Analysing the risks of adopting circular economy initiatives in manufacturing supply chains," Business Strategy and the Environment, Wiley Blackwell, vol. 30(1), pages 204-236, January.
    8. Ata Allah Taleizadeh & Aria Zaker Safaei & Arijit Bhattacharya & Alireza Amjadian, 2022. "Online peer-to-peer lending platform and supply chain finance decisions and strategies," Annals of Operations Research, Springer, vol. 315(1), pages 397-427, August.
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