Research On Hedging And Financing Strategies Of Enterprises In The Context Of Green Finance

Since 2012,extreme climate disasters have occurred frequently,which have adversely affected social stability and macroeconomic development,and sustainable development has become a global consensus.In the context of the continuous development of global low-carbon economy,green finance has become one of the priorities of many countries around the world.The construction of a green financial system not only helps accelerate the green transformation of China’s economy and promote the country’s economic development from high-speed development to highquality development,but also helps promote technological progress in environmental protection,new energy,energy conservation and other fields,accelerate the cultivation of new economic growth points and enhance economic growth potential.In this context,this paper focuses on the research issues of hedging and financing strategies of green finance.It mainly studies the financial hedging strategies in green supply chain,carbonneutral bond financing and the green credit financing under carbon emission regulation.To address the issue of financial hedging strategies in green supply chains,we introduce index-based price contracts to help manufacturers reasonably hedge the risks caused by the fluctuation of input commodity prices.The manufacturer can transfer part of the risk to the downstream retailer through the contract to realize risk-sharing in the supply chain.We discuss the optimal hedging strategy and the product’s green degree in four structures:monopoly(manufacturer sets contract),monopoly with Nash bargaining,retailer competition,and manufacturer competition.Our model follows the two-stage Stackelberg game,which delivers us the results that the hedge ratio is positively related to the consumer’s preference for green products but is inversely related to the green product research and development costs.Interestingly,in the manufacturer competition supply chain,the profits of both manufacturers increase significantly when the input commodity price fluctuates slightly,but as that fluctuation continually increases,the profit of one manufacturer declines,while the profit of the other rises slowly.Considering another perspective,green degree competition harms the profits of the manufacturers and retailer,as well as decreasing the green degree.However,retailer price competition raises the profits of manufacturers and retailers,and also makes the green degree of the product rise.To solve the problem of financing carbon-neutral bonds issued by enterprises,we investigate carbon-neutral bonds issued between February 2021 and August 2022 and find that the yield spread of these initial carbon-neutral bonds is significantly lower,implying lower financing costs than conventional bonds issued by the same companies and green bonds issued during the same 18-month period.An event study analysis shows stock returns increased after the announcement of carbon-neutral bonds.Stock liquidity is identified as the possible mechanism through which carbon-neutral bond issuance may improve stock returns,though the stock liquidity could be reduced if a company with a high environmental,social,and governance(ESG)rating issues carbon-neutral bonds.Our findings that a negative carbon-neutral premium exists highlight the role that future carbon-neutral bonds could play in benefiting the Chinese firms issuing such bonds.The final study addresses green credit financing.We investigate the relationship between green credit financing and corporate green innovation by using the number of green patents of 490 Chinese listed companies.Under the constraint of strict emission regulation requirements,we investigate the manufacturers’ optimal green production decisions and the retailers’ optimal purchasing decisions supported by green credit financing and compare the differences between carbon tax regulation and cap-and-trade regulation.Three scenarios are considered:baseline model(monopolistic supply chain),manufacturer competition,and uncertain demand.Compared with the baseline model,we discover that the degree of competition between manufacturers and demand uncertainty have important effects on corporate profits,net emissions and social welfare.In particular,when the manufacturer’s degree of risk aversion and uncertainty exceed the threshold at high levels,social welfare declines significantly,even below the social welfare of the baseline model.Additionally,we prove that when the unit carbon emission cost is consistent,the optimal decisions of the manufacturer and the retailer are consistent under the carbon tax regulation and the cap-and-trade regulation.However,the manufacturer can always obtain more profits under the cap-and-trade regulation.Considering another perspective,when the unit carbon tax is lower than the unit carbon price,we can find a carbon emission quota that makes the manufacturer’s profit the same under both regulations.Moreover,green credit financing can be used as a way to align the optimal decisions of manufacturers and retailers under carbon tax regulation and cap-and-trade regulation,so as to achieve fairness even when the unit carbon costs of the two regulations are inconsistent.