IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v13y2021i11p5814-d559721.html
   My bibliography  Save this article

Impact of Green Credit Financing and Carbon Emission Limits on the Supply Chain Based on POF

Author

Listed:
  • Liurui Deng

    (School of Business, Hunan Normal University, Changsha 410006, China)

  • Lan Yang

    (School of Economics and Trade, Hunan University, Changsha 410079, China)

  • Wei Li

    (School of Economics and Trade, Hunan University, Changsha 410079, China)

Abstract

In recent years, environmental protection has been paid more and more attention. Green credit policy (GCP) is one of the significant preferential policies for government to encourage enterprises to vigorously develop green projects. We are interested in the impact of the central bank’s GCP on the profits and optimal strategies of manufacturers and suppliers related to POF (purchase order financing). Specifically, we build a game-theoretical model consisting of a manufacturer, a bank and a green supplier and a non-green supplier. Furthermore, the optimal strategies of the manufacturer and suppliers when the bank or the government sets a carbon emission cap on suppliers are discussed. We come to some important conclusions about a GCP that promotes the development of green projects since it brings higher profits to both the manufacturer and suppliers than the lack of a GCP. Furthermore, the higher the production cost, the better the effect of a GCP. Under the carbon emission restrictions required by the government, the effect of GCP is weakened and the profits of the manufacturer and the suppliers are reduced to zero due to the gradually increasing delivery risks as production costs increase.

Suggested Citation

  • Liurui Deng & Lan Yang & Wei Li, 2021. "Impact of Green Credit Financing and Carbon Emission Limits on the Supply Chain Based on POF," Sustainability, MDPI, vol. 13(11), pages 1-20, May.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:11:p:5814-:d:559721
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/13/11/5814/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/13/11/5814/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. An, Simin & Li, Bo & Song, Dongping & Chen, Xue, 2021. "Green credit financing versus trade credit financing in a supply chain with carbon emission limits," European Journal of Operational Research, Elsevier, vol. 292(1), pages 125-142.
    2. Jiri Chod & Nikolaos Trichakis & Gerry Tsoukalas & Henry Aspegren & Mark Weber, 2020. "On the Financing Benefits of Supply Chain Transparency and Blockchain Adoption," Management Science, INFORMS, vol. 66(10), pages 4378-4396, October.
    3. Wu, Tao & Kung, Chih-Chun, 2020. "Carbon emissions, technology upgradation and financing risk of the green supply chain competition," Technological Forecasting and Social Change, Elsevier, vol. 152(C).
    4. Tseng, Ming-Lang & Wu, Kuo-Jui & Hu, Jiayao & Wang, Chin-Hsin, 2018. "Decision-making model for sustainable supply chain finance under uncertainties," International Journal of Production Economics, Elsevier, vol. 205(C), pages 30-36.
    5. Liu, Zugang (Leo) & Anderson, Trisha D. & Cruz, Jose M., 2012. "Consumer environmental awareness and competition in two-stage supply chains," European Journal of Operational Research, Elsevier, vol. 218(3), pages 602-613.
    6. Chunhua Tang & Honglin Yang & Erbao Cao & Kin Keung Lai, 2018. "Channel competition and coordination of a dual-channel supply chain with demand and cost disruptions," Applied Economics, Taylor & Francis Journals, vol. 50(46), pages 4999-5016, October.
    7. Chod, Jiri & Lyandres, Evgeny & Yang, S. Alex, 2019. "Trade credit and supplier competition," Journal of Financial Economics, Elsevier, vol. 131(2), pages 484-505.
    8. Christopher S. Tang & S. Alex Yang & Jing Wu, 2018. "Sourcing from Suppliers with Financial Constraints and Performance Risk," Manufacturing & Service Operations Management, INFORMS, vol. 20(1), pages 70-84, February.
    9. Tunay I. Tunca & Weiming Zhu, 2018. "Buyer Intermediation in Supplier Finance," Management Science, INFORMS, vol. 64(12), pages 5631-5650, December.
    10. Panos Kouvelis & Wenhui Zhao, 2012. "Financing the Newsvendor: Supplier vs. Bank, and the Structure of Optimal Trade Credit Contracts," Operations Research, INFORMS, vol. 60(3), pages 566-580, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Junjian Wu & Jennifer Shang, 2021. "Green Credit Financing Equilibrium under Government Subsidy and Supply Uncertainty," Sustainability, MDPI, vol. 13(22), pages 1-22, November.
    2. Liurui Deng & Wentang Xu & Juan Luo, 2021. "Optimal Loan Pricing for Agricultural Supply Chains from a Green Credit Perspective," Sustainability, MDPI, vol. 13(22), pages 1-21, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Jing & Wang, Kai & Li, Xiang & Zhao, Ruiqing, 2022. "Suppliers’ trade credit strategies with transparent credit ratings: Null, exclusive, and nonchalant provision," European Journal of Operational Research, Elsevier, vol. 297(1), pages 153-163.
    2. Shengying Zhao & Xiangyuan Lu, 2023. "Guarantee Mechanism in Accounts Receivable Financing with Demand Uncertainty," Sustainability, MDPI, vol. 15(3), pages 1-20, January.
    3. Gongbing Bi & Hao Pan, 2023. "The Impact of Platform Encroachment on the Manufacturer’s Financing Strategy," Sustainability, MDPI, vol. 15(5), pages 1-21, March.
    4. Cao, Yiqiu & Wang, Qiangqiang, 2022. "The informational role of guarantee contracts," European Journal of Operational Research, Elsevier, vol. 301(1), pages 191-202.
    5. Jiang, Wen-Hui & Xu, Ling & Chen, Zhen-Song & Govindan, Kannan & Chin, Kwai-Sang, 2022. "Financing equilibrium in a capital constrained supply Chain: The impact of credit rating," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 157(C).
    6. Fu, Ke & Wang, Ce & Xu, Jiayan, 2022. "The impact of trade credit on information sharing in a supply chain," Omega, Elsevier, vol. 110(C).
    7. Yang, Honglin & Zhuo, Wenyan & Shao, Lusheng & Talluri, Srinivas, 2021. "Mean-variance analysis of wholesale price contracts with a capital-constrained retailer: Trade credit financing vs. bank credit financing," European Journal of Operational Research, Elsevier, vol. 294(2), pages 525-542.
    8. Wang, Chengfu & Chen, Xiangfeng & Xu, Xun & Jin, Wei, 2023. "Financing and operating strategies for blockchain technology-driven accounts receivable chains," European Journal of Operational Research, Elsevier, vol. 304(3), pages 1279-1295.
    9. Zelong Yi & Yulan Wang & Ying‐Ju Chen, 2021. "Financing an Agricultural Supply Chain with a Capital‐Constrained Smallholder Farmer in Developing Economies," Production and Operations Management, Production and Operations Management Society, vol. 30(7), pages 2102-2121, July.
    10. Yan, Nina & Zhang, Yaping & Xu, Xun & Gao, Yongling, 2021. "Online finance with dual channels and bidirectional free-riding effect," International Journal of Production Economics, Elsevier, vol. 231(C).
    11. Chang, Shuhua & Li, Anqi & Wang, Xinyu & Zhang, Jiayue, 2023. "Optimal combination of platform channel contract and guarantee financing strategy in e-commerce market," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 172(C).
    12. Junjian Wu & Henry Xu, 2021. "Information Leakage and Financing Decisions in a Supply Chain with Corporate Social Responsibility and Supply Uncertainty," Sustainability, MDPI, vol. 13(21), pages 1-22, October.
    13. Sun, Cuiying & Zhang, Xiong & Zhou, Yong-Wu & Cao, Bin, 2022. "Pricing, financing and channel structure for capital-constrained dual-channel supply chains with product heterogeneity," International Journal of Production Economics, Elsevier, vol. 253(C).
    14. Jain, Richa & Reindorp, Matthew & Chockalingam, Arun, 2023. "Buyer-backed purchase-order financing for SME supplier with uncertain yield," European Journal of Operational Research, Elsevier, vol. 307(2), pages 758-772.
    15. Li, Yanhai & Gu, Chaocheng & Ou, Jinwen, 2020. "Supporting a financially constrained supplier under spectral risk measures: The efficiency of buyer lending," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).
    16. Li, Jianbin & Cheng, Wei & Song, Xiangrong & Zheng, Yuting, 2023. "The value of buyer financing with a minimum quantity commitment in pull supply chains," Omega, Elsevier, vol. 121(C).
    17. Xiao Huang, 2022. "Financing Disruptive Suppliers: Payment Advance, Timeline, and Discount Rate," Production and Operations Management, Production and Operations Management Society, vol. 31(3), pages 1115-1134, March.
    18. Yoo, Seung Ho & Choi, Thomas Y. & Kim, DaeSoo, 2021. "Integrating sourcing and financing strategies in multi-tier supply chain management," International Journal of Production Economics, Elsevier, vol. 234(C).
    19. Wei Zhang & Hsiao-Hui Lee, 2022. "Investment Strategies for Sourcing a New Technology in the Presence of a Mature Technology," Management Science, INFORMS, vol. 68(6), pages 4631-4644, June.
    20. Shi, Jinzhao & Liu, Dian & Du, Qiang & Cheng, T.C.E., 2023. "The role of the procurement commitment contract in a low-carbon supply chain with a capital-constrained supplier," International Journal of Production Economics, Elsevier, vol. 255(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:13:y:2021:i:11:p:5814-:d:559721. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.