Research On Supply Chain Financing Equilibrium Under Carbon Emission Regulation

In the environment of low-carbon economy developing,enterprises are taking the main social responsibility of promoting the sustainable developmen t of economy.The concept of green low-carbon development and government carbon emission control are the basic principles that enterprises must implement under the current mode of promoting high-quality economic development in China.Under such circumstanc es,the decisions on enterprises’ production and operation of enterprises have been changed: on the one hand,enterprises have to consider the constraints of external carbon emission regulations in production and operation s progress,which increases the difficulty of enterprises’ operations;on the other hand,the quantification and trading of carbon emission permits have changed the cost structure of enterprises,affecting the enterprises’ profitability.In reality,both large enterprises and small and medium-sized enterprises are facing the problem of capital constraints,which further increases the difficulty of enterprises’ operations and the realization of green low-carbon development goals.Carbon emission constraints and green development further highlights the financing difficulties of enterprises.Considering the uncertainty of market environment and the features of each company,information asymmetry is a common phenomonen,and information incompleteness inevitably affects the production,operation and financing of enterprises.Therefore,this paper attempts to study the impact of carbon emission constraints on enterprise financing and operations under different information conditions,financing modes of different enterprises and ways to improve the profitability of enterprises,so as to provide theoretical references for solving the financing difficulties of enterprises and promoting the sustainable economic development.In order to analyze how enterprises make decision on financing and operations with asymmetric information,this paper establishes multi-player game and uses the information economic theory to study the financial decisions and operational decisions of different kind of firms with symmetric information.Afterward,this paper establish dynamic game model with incomplete information to analyze the equilibriums with asymmetric information and the impacts of information sharing on enterprise financing and operations.This paper starts from the basic symmetric information scenario.As different firms have different financing ways,this paper study bank credit financing with pledging carbon emission permits and trade credit financing based on commercial credit,respectively.It shows that pledging carbon emission permits,as an important part of firm financing and manufacturing,can be a source of making profit for a manufacturer.Under the carbon cap-and-trade regulation,because consumers pay attention to environmental protection,they are willing to purchase more low-carbon products.In this case,pledging carbon emission permits not only promotes firms to reduction carbon emissions to take social responsibility,but also improves firms’ production efficiency and brings more profit to firms.The finding also shows that a commercial bank keeps the balance of making profit and avoiding risks.As a result,controlling the loan size eliminates firms’ overproduction problem to some extent.This also helps to avoid excessive consumption of resources to realize efficient resource allocation.In order to promote the cooperation among enterprises and improve the supply chain performance,this paper designs a transfer payment contract to achieve supply chain coordination in the scenario without bankruptcy,and a guarantee contract to achieve Pareto improvement in bankrupt scenario.Under trade credit financing mode employed by small and medium-sized enterprises,the results show that the capital-constrained enterprise can obtain the required funds in full through deferred payment,but the loan scale is affected by the initial carbon cap and the carbon emissions per unit product when the capital-constrained enterprise faces bankruptcy risk.Governments can control firms’ bankruptcy risk by properly allocating intial carbon emission permits.Considering the loss-averse characteristics of small and medium-sized enterprises,the research conclusion shows that the financing scale of capital-constrained enterprises and the wholesale price provided by upstream enterprises are all reduced.In the bank credit financing model with asymmetric information,considering the impact of consumers’ low-carbon environmental awareness on market terminal demand,this paper introduces demand elasticity of carbon emission reduction into the market demand function,and compares each party’s decision in no information sharing scenario with that in information sharing scenario.The results show that capital-constrained enterprise that can observe the market demand signal still faces bankrupt risk;whereas the bankruptcy probability is different based on observing different signals.When observing the positive market demand forecast signal,the capital-constrained enterprises do not face any bankruptcy risk.Therefore,firms can lower their bankruptcy risk by obtaining more market dem and information.In order to lower the wholesale price and to increase the loan size,the capital-constrained enterprise which has private demand information is willing to share information with the upstream firm and the commercial bank.In the trade credit financing model with asymmetric information,this paper analyzes the impacts of information asymmetry on enterprise financing and the supply chain equilibrium under carbon emission regulation.The results show that both the capital-constrained manufacturers reduce their outputs to save total costs under cap-and-trade regulation.The capital-constrained firm endowed with private demand information faces no bankruptcy risk;whereas the uninformed capital-constrained firm faces bankruptcy risk.When the informed enterprise orders material based on the market demand information,the upstream supplier can infer the demand information according to the order quantity.For the upstream firm,it may leak the demand information the uninformed downstream firm when facing no bankruptcy risk;whereas the informed downstream firm is willing to actively share information with its competitor to take the advantage of the first-mover.The main innovations of this paper are as follows: Firstly,the financing channels of enterprises are subdivided into big enterprises and small and medium-sized enterprises according to the types of enterprises.Large enterprise s have good bank credit and large assets that can be used for mortgage loans,so large enterprises finances from banks.Small and medium-sized enterprises lack bank credit foundation,and they are generally in the stage of development and growth with limited assets,which makes it difficult for them to obtain financing from banks,thus they rely on trade credit to borrow money.Secondly,according to the different types of enterprises,this paper explores the ways in which carbon emission regulation plays its role.For large enterprises,on the one hand,they have the strength to use advanced cleaner production equipment;on the other hand,enterprises can get lager loan size by pledging more carbon emission permits.Based on the above two considerations,large enterprises inverst in carbon emission reduction.Small and medium-sized enterprises have limited funds,and only trade carbon emissions through the carbon trading market.Thirdly,information asymmetry and information sharing are introduced into the capital-constrained supply chain.Considering that enterprises in different nodes of the supply chain have different ability to obtain market demand information,and downstream enterprises can often obtain sufficient market information,this paper introduces information asymmetry into the study of enterprise financing equilibrium under carbon emission regulation.In the analysis of trade credit financing,small and medium-sized enterprises are subdivided into enterprises with information advantage and enterprises with information disadvantage.Fourthly,based on consumer behavior theory,this paper introduces consumers’ low-carbon preference into product demand function,and studies the impact of consumer’s green low-carbon preference on enterprise financing and production.