279 / 2024-04-24 07:36:32

Operational Strategy for Supply Chain Finance with Green Asset-backed Securitization in Emission Reduction Supply Chain

Supply chain financing,Green asset-backed securitization,Emission reduction,centralization

Supply chain finance (SMF) with green asset-backed securitization (ABS) is an innovative financial instrument to alleviate financial constraints on operations and emission reduction investments. As this financing model becomes more widely used in practice, it is observed that both decentralized and centralized processes emerge. However, there is a scarcity of research related to the selection of centralized programs. In this paper, we design the game model to analyze the impact of these two financing procedures on supply chain operations and emission reduction strategies. To determine the effectiveness of centralized SMF with green ABS, we develop an in-depth analysis to compare the decentralized with centralized system. The optimal solutions for operation and emission reduction are obtained and the characteristics are also revealed. Our findings illustrate that the leading firm can improve the emission reduction level of the downstream by offering financing. Besides, the market credit is the key factor to determine between the decentralized and centralized processes. Furthermore, the region exists that allows both the manufacturer and the retailer to achieve a win-win.