Green Preferences Research Articles

Physical climate change risk and ESG green premium

ABSTRACT We build an asset pricing model that incorporates climate change risk and firms’ ESG engagement to analyse their interactive effects on equity returns. Our model shows that a firm’s ESG engagement has three channels for influencing stock returns: its direct impact on resisting climate change risk, indirect reduction in systematic risk and attraction of green preference, and the empirical evidence shows that both risk–return relation and ESG engagement are priced. We also point out an inevitably negative and convex relation between the market Sharp Ratio and stocks market beta in an economy with climate change risk.

Geopolitical turmoil and investor green preference: Evidence from the corporate bond market

In this study, we analyze a sample of 1,630 corporate green bonds issued internationally between November 2012 and January 2024 to investigate the yield differences between green and non-green bonds. Our findings reveal a small greenium, particularly significant in the secondary market among carbon-intensive industries, first-time green bond issuers, and riskier issuances. We show that Geopolitical Risk (GPR) significantly influences the greenium in the secondary market, primarily driven by geopolitical acts rather than threats. Additionally, we establish that third-party certifications and corporate exposure to environmental risk are critical in explaining the GPR-greenium relationship. These results underscore the importance of GPR in enhancing investor preference for green bonds, offering important implications for both practice and policy.

Investigating the link between green preferences and organic food purchase: The mediating and moderating role of attitudes and environmental concerns on consumer purchase intentions

Investigating the link between green preferences and organic food purchase: The mediating and moderating role of attitudes and environmental concerns on consumer purchase intentions

Optimal Financing Strategy in a Dual-Channel Supply Chain with Agricultural Product

This study models a two-stage agricultural supply chain consisting of a financially constrained manufacturer of agricultural products and a financially stable retailer. We examine two supply chain structures: traditional and dual channel. Our analysis centers on the effects of consumer green preferences, consumer sensitivity to the freshness of agricultural products, and substitution rate between green and non-green agricultural products on the profitability of supply chain members. The purpose of this work is to study the optimal financing strategy for companies producing both regular and organic products simultaneously. We analyze optimal financing strategies for the manufacturer using three models: bank financing, internal debt financing, and internal equity financing. Our results indicate that in both traditional and dual-channel supply chains, increased consumer green preferences or greater sensitivity to the freshness of agricultural products improve supply chain profitability, while a higher substitution rate between green and non-green products reduces profits. Additionally, the manufacturer prefers internal debt financing when consumer environmental awareness is low. Conversely, as consumer environmental awareness increases, internal equity financing becomes more profitable. These findings offer valuable insights for agricultural product manufacturers facing financial constraints, assisting them in selecting the most appropriate financing model.

Investment in fuel‐consumption reduction technologies in a vehicle supply chain under different subsidy policies: A dynamic framework

AbstractIt develops a differential game model of a fuel car supply chain in which consumers' low fuel consumption, green preferences, and government subsidies promote manufacturers' investment in fuel‐consumption reduction technologies (FCRT); the price, the fuel consumption per mile, and the retailer's marketing efforts jointly determine the demand for the product. There are four game scenarios constituted by ex ante or ex post government that subsidizes and shares or does not share marketing costs. The results show that ex ante and ex post subsidies can incentivize investment in FCRT. However, the preferable subsidy model depends on the parameter values; the manufacturer‐led marketing cost‐sharing contract results in supply chain coordination.

Green-adjusted share prices: A comparison between standard investors and investors with green preferences

We employ the green revenue factors of firms, used in the computation of the FTSE Russell 1000 Green Revenues index to create corresponding green-adjusted share prices. We compute the firm betas, under both the standard and the green-adjusted share pricing. Our findings suggest that tilting of firm stock returns towards green finance could change temporarily asset pricing views. The Fama-French risk factors display very high correlations between the two settings. Nevertheless, there are some significant differences between standard and green-adjusted betas during periods associated with green activism and positive political decisions of financially supporting the global climate action.

The impact of air pollution on green investments: Green preference and investor sentiment

Green assets are sensitive to environmental changes and are pivotal in achieving sustainable development. Some empirical studies have shown that air pollution, as part of environmental change, affects stock market investment; however, the mechanisms by which air pollution affects investment in green assets have not been explored in depth. This study investigates the impact of air pollution on green stocks through investor sentiment and green preference. Our empirical analysis reveals that declining air quality prompts negative investor sentiment, exerting an adverse impact on the stock market. Conversely, green preference exerts a positive influence on green stocks, with the magnitude of this effect being contingent on the degree of greenness (i.e., depth and breadth) of the stocks. Companies with a high degree of greenness experience a significant positive correlation between air pollution and stock prices, whereas this relationship is not significant for companies with lower greenness. Furthermore, the COVID-19 pandemic has served to alleviate the impact of air pollution on the stock market due to the diversion of public attention by COVID-19. These findings show that governments can take measures to mitigate negative impacts and facilitate green preference to promote green economic transformation and upgrading.

Optimizing Operational and Sustainable Decisions for GASC

This study delves into the operational decision-making and sustainability dynamics within a two-tier green agricultural supply chain (GASC), comprising a manufacturer and a retailer. By developing decision models for the manufacturer, both with and without outward altruism, we explore the intricate interplay of government subsidies, consumer green preferences, and manufacturers' altruistic behavior influencing operational efficiency and sustainability within the GASC based on the Stackelberg Game. Our findings underscore the intricate relationship between these factors and the retail pricing of green agricultural products. Specifically, we demonstrate that while the manufacturer's outward altruism is significant, the combined effects of government subsidies and consumer preferences exert substantial influence on pricing strategies. Moreover, we reveal that government subsidies, consumer preferences for sustainability, and manufacturers' altruistic actions collectively bolster the economic, environmental, and social dimensions of sustainability within the GASC.

Pricing and Financing Strategies of Dual-Channel Green Supply Chain with Risk Aversion and Consumer Preferences

Nowadays, considering the growing tendency of companies toward e-commerce as well as green production, dual-channel green supply chain management has become particularly important. This paper investigates pricing decisions within a dual-channel green supply chain framework while considering the capital constraints faced by risk-averse manufacturers. Simultaneously, the impact of the degree of risk aversion, consumer green preferences, and channel preferences on the optimal decision-making process of green supply chain members is analyzed. We address the issue of financial constraints faced by manufacturers through bank loans and trade credit financing and compare the two cases. Our findings illustrate that trade credit financing outperforms bank loan financing in the dual-channel green supply chain. Moreover, pricing decisions under different models are influenced by consumer preferences and risk aversion. Specifically, the greenness of the product, wholesale price, and sale price exhibit negative correlations with manufacturers’ risk aversion but positive correlations with consumer preferences.

The Impact of CSR Implement Modes on Sustainable Supply Chain Pricing and Green Decision Making

Green transformation is an effective way for supply chains to achieve sustainable development. In the heterogeneous substitute product coexistence environment, it is valuable to explore the motivation behind CSR implementation as well as the advantages and differences associated with different members’ CSR implementations. In this study, we consider that the manufacturer produces both green products and ordinary products that are substitutes for each other and construct a CSR-absence scenario (Model N), a retailer implementing CSR scenario (Model R), and a manufacturer implementing CSR scenario (Model M). Applying a game-theory-based method, we obtain the optimal pricing, green decision, and supply chain profit under different scenarios. We analyze the effects of consumers’ green preference, green product function coefficient, and CSR level on decision making and performance. Through comparison and numerical analysis, we find the following: (1) Although the CSR behaviors of the manufacturer and the retailer squeeze the market demand space of the ordinary products, the greenness of the green product increases, and the retail price decreases. This not only enhances the consumer surplus of green products but also increases the profit and social welfare of the supply chain system. (2) The eco-friendliness of green products, product demand, and social welfare levels are the highest when the retailer implements CSR, followed by when the manufacturer implements CSR, and are the lowest in the CSR-absence scenario. In addition, the following retailer can enhance both its and the manufacturer’s profits through implementing CSR within a reasonable range. (3) The numerical analysis results show that, when the functional attributes of the green products meet a certain level, supply chain members implementing CSR does not affect consumers’ choice of green products.

Content analysis of male & female green preferences on thrift clothes

Content analysis of male & female green preferences on thrift clothes

Green finance, investor preferences, and corporate green innovation

This research investigates the relationship between green finance and corporate green innovation. Based on a sample of publicly listed companies in China from 2015 to 2022, we find a significant positive association between green finance and green innovation of enterprises. The positive relationship is more pronounced among heavily polluting and financially constrained companies. Furthermore, investors’ green preferences amplify the positive impact of green finance on green innovation. Our findings are robust to a series of econometric tests. The present study contributes to the literature on green finance and innovation.

Dynamic Incentive Mechanisms for Collaborative Innovation of Green Supply Chain Considering Digital Capability and Consumer Green Preference

In light of increasingly prominent environmental issues, inspiring green supply chain (GSC) members to engage in collaborative innovation is crucial to improve environmental performance. In this paper, in relation to a two-level GSC consisting of manufacturers and suppliers, differential equations involving the greenness of intermediate and final products as state variables are constructed considering the effect of digital capability on green innovation. Subsequently, designs for three incentive mechanisms—the greenness reward, the R&D effort reward, and the digital construction reward—are presented, and their long-term dynamic effects on the economic, environmental, and social benefits are compared and analyzed. Finally, the impacts of consumer green preference and the contribution of digital capability to the advancement of green innovation are explored. The findings show that all these incentives can boost economic, environmental, and social benefits while motivating the supplier. To achieve the best incentive effect, the reward coefficient should fall within a specific range. The digital construction reward mechanism is the most favourable in the initial stage, while the R&D effort reward mechanism is the most appropriate in the long term. The promotion effects of digital capability on green innovation and consumer green preference have the potential to enhance economic, environmental, and social performance.

Air pollution levels enhance green bond investment: green preference and environmental perception thresholds

Environmental change is a crucial factor influencing green investment, and air pollution affects green assets through green preference. This study analyzes the impact of air pollution levels on the green bond using the threshold model. Since investors have physiological thresholds for perceiving air pollution, green preferences change investor behavior once air pollution reaches a certain threshold. The empirical results confirm that at low air pollution levels, weak physical stimuli are not sufficient to induce strong environmental perceptions, resulting in an insignificant role for green preference. However, when air pollution exceeds the threshold, the effect of air pollution becomes significantly positive due to enhanced environmental perceptions. Additionally, major crisis events (e.g. COVID-19) may weaken the role of green preference by distracting investors, leading to an insignificant impact of air pollution on green bonds after the crisis. These findings help enterprises to achieve green transformation and sustainable development through green debt financing.

Optimal contract design for carbon emission reduction in a green supply chain: Monetary incentive vs. symbolic incentive

AbstractA supply chain with a manufacturer and a seller is studied in this paper for the impact of monetary and symbolic incentives on reducing carbon emissions. It is the responsibility of the manufacturer to invest in carbon emission abatement technologies and that of the seller to sell such products to consumers with green preferences. The study findings reveal that (1) both monetary and symbolic incentives can contribute to reducing carbon emissions but the choice between them depends on the trade‐off between the cost‐sharing ratio and the market interest rate; (2) implementing a hybrid policy could crowd‐out carbon emission effects; and (3) the manufacturer may maximize his profits under a hybrid policy, but the seller may struggle to cover his expenses, which could hinder effective collaboration within the supply chain.

Research on Green Design Strategy of Electrical and Electronic Manufacturing Enterprises Based on the Perspective of Tripartite Evolutionary Game

Green design emphasizes the environmental attributes of the product life cycle, which can prevent environmental pollution at the source and reduce resource consumption. Based on the evolutionary game theory, this paper constructs a tripartite game model between “government-electrical and electronic manufacturing companies-consumers”, explores the influence of participants’ strategic choices and parameters on the evolutionary behavior of the three parties in different situations, and uses Matlab software to conduct numerical simulation analysis. Simulation analysis is the process of simulating real-world events and system behavior through computer models to assess, validate, and predict their performance and response. The research results show that the strategic choices of the three parties influence each other and government supervision and green consumption are conducive to incentivizing manufacturing companies to carry out green design. Consumer green preferences, environmental tax rates, corporate recycling revenue, and increases in consumer recycling revenue are all conducive to product design. Compared to environmental taxes, corporate subsidy policies have a greater impact on the behavior of the government, manufacturing companies, and consumers. Compared to consumer subsidies, corporate subsidy policies have a more significant effect on the behavior of governments and manufacturing companies, while for consumers, the opposite is true.

Impact of Consumer Subsidy Considering Subsidy Threshold on New Energy Vehicle Firms and Environmental Benefits

This paper investigates a competitive market consisting of two new energy vehicle (NEV) firms with a technology gap and consumers with green preferences. By employing a Hotelling model, we obtain the equilibrium outcomes of two competing firms without and with segmented consumer subsidy (SCS) following Nash game theory. We further explore the incentive effect, effective scope of SCS policy and the impacts of subsidy threshold and technology improvement on it, which fills the gap in the literature and provides managerial insights. We find that SCS can only play a role when the threshold is intermediate, and the government can expand the effective scope of subsidies by cultivating consumers’ green preferences and strengthening the intensity of subsidies. Moreover, the government can change the competitiveness and green level gap of two firms through the threshold. When threshold is small (large), increasing it can narrow (expand) the green level gap between two firms but widen (narrow) the market gap. We also find that implementing an SCS policy has a positive impact on environmental benefits and technological improvement is more likely to cause environmental damage. However, the government can effectively decrease the degree and probability of damage by raising the subsidy threshold and reducing the subsidy amount.

Optimal subsidy policy for new energy vehicles based on the influence of multiple factors and consumers' green preference

AbstractPolicies concerning subsidies for new energy vehicles and consumers' environmental preferences significantly impact the sales of such vehicles. To investigate the correlation between sales and subsidies or consumers' environmental preferences and to devise optimal subsidy strategies, two Stackelberg game models are constructed based on both monopoly and duopoly markets, with solutions derived for Nash equilibrium points. In order to refine the strategy for subsidy adjustments, two dynamic adjustment models considering bounded rationality are established. Additionally, the process of adjusting subsidies towards Nash equilibrium points is analyzed. Simulations, utilizing actual research data, are performed to assess China's current adjustment strategies. The findings reveal a substitution relationship between consumers' environmental preferences and subsidies. Furthermore, optimal subsidy levels and bounded rational subsidy adjustment strategies are identified. Governments should thoroughly consider consumers' environmental preferences when refining subsidy policies, as it is a crucial factor influencing the development of the new energy vehicle industry.

Application of Blockchain Technology in Green Supply Chain

Consumer awareness of green environmental protection is the main driving force for manufacturers to produce green products, cultivate consumers' environment-friendly consumption concept, improve consumers' green preference, and actively guide consumers to buy green and low-carbon products. Green trust is an important factor leading consumers to buy green products, the application of blockchain technology can improve the transparency of green information, maintain the green brand image, and then enhance green trust, increase the sales of green products.

Regional integration policies and urban green innovation: Fresh evidence from urban agglomeration expansion

Climate change is a non-traditional security crisis affecting the global economy and diplomatic progress. In order to curtail carbon emissions and alleviate the perils of climate change at their roots, urban green innovation (UGI) has emerged as a pivotal technological solution. Using the expansion of the Yangtze River Delta urban agglomeration in China as a case study, this paper develops a quasi-experimental model to analyze the effects of regional integration policies on UGI. The main findings are: (1) Regional integration policies significantly enhance UGI and their impact is more pronounced with the expansion of urban agglomerations; (2) Regional integration policies contribute to the advancement of exploitative green innovation while tending to diminish exploratory green innovation; (3) The green innovation effects (GIEs) created by the expansion of regional integration policies are largely influenced by governmental mechanisms on environmental governance as well as residents’ green preferences. Based on these findings, recommendations are put forward to promote UGI from the perspective of policy implementation.