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The diffusion dynamics of the informal sector and sustainable WEEE supply chain

Author

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  • Chen, Yenming
  • Wu, Tien-Hua

Abstract

Literature indicates that the main obstacle to better manage existing WEEE recycling supply chain in the developing countries is lake of environmental laws and/or lax enforcement, particularly in control instruments to overcome the difficulty of informal e-waste processing firms and its supply chain. Policy makers may rely on new legislative framework to control environmental performance and the health impacts of pollution; however, this strategy is not clearly effective as the informal nature of this supply chain blocks the enforcement efforts and causes the high cost of monitoring. Hence, it is definitely crucial to understand the interaction between the environmental policy options and economic consideration when achieving the sustainability of operations across the WEEE supply chain. In this study, we propose the simplest form of epidemic spreading, namely a criss-cross epidemic model, and aim to examine the legislative stringency for observing the diffusion dynamics of informal and formal sectors in an e-waste recycling system. We find that a diffusion threshold does exist and it is related to the regulatory stringency. Effective population changes dramatically if it grows beyond this diffusion threshold. In particular, a government agency is able to layout a minimal regulatory stringency so that the participants of the informal sector diminish quickly and eventually cease while the economy remains unhurt. We use a simplified numerical study to test the proposed criss-cross epidemic model. Based on significant findings, this paper provides managerial implications for developing the new environmental legislative framework which is not only feasible but also beneficial to achieving the sustainable WEEE supply chain.

Suggested Citation

  • Chen, Yenming & Wu, Tien-Hua, 2010. "The diffusion dynamics of the informal sector and sustainable WEEE supply chain," MPRA Paper 25650, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:25650
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    File URL: https://mpra.ub.uni-muenchen.de/25650/2/MPRA_paper_25650.pdf
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    References listed on IDEAS

    as
    1. Chen, Yenming J. & Sheu, Jiuh-Biing, 2009. "Environmental-regulation pricing strategies for green supply chain management," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 45(5), pages 667-677, September.
    2. Wu, Fang & Huberman, Bernardo A. & Adamic, Lada A. & Tyler, Joshua R., 2004. "Information flow in social groups," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 337(1), pages 327-335.
    3. Moreno-S Nchez, Roc O Del Pilar & Maldonado, Jorge Higinio, 2006. "Surviving from garbage: the role of informal waste-pickers in a dynamic model of solid-waste management in developing countries," Environment and Development Economics, Cambridge University Press, vol. 11(03), pages 371-391, June.
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    Cited by:

    1. Paunić, Alida, 2016. "Brazil, Preservation of Forest and Biodiversity," MPRA Paper 71462, University Library of Munich, Germany.

    More about this item

    Keywords

    Environmental issue; regulatory stringency issue; epidemiological model; informal sector-diffusion; sustainable WEEE supply chain;

    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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