Manufacturing Investment Research Articles

Оценка вариации влияния инфраструктурных и производственных инвестиций на региональный экономический рост

The article evaluates the varying impact of infrastructure and manufacturing investments on regional economic growth. A competent and well-thought-out investment allocation policy is crucial for successful country development, making this paper relevant. The literature presents differing opinions on the impact of investment on economic growth, particularly regarding the prioritisation of financing production or infrastructure projects. The study attempts to address the issue of reverse causality and omitted variables in the framework of combating false positive and false negative relationships. This is achieved through modelling based on spatial autoregressive data analysis and the use of the instrumental variables’ method. The ultimate goal is to obtain more accurate estimates of the impact of the considered indicators on regional economic growth. The results indicate that a 1 percentage point increase in infrastructure investment leads to a 0.52 percentage point increase in economic growth, which is comparable to the 0.53 percentage point impact of production investment. It is concluded that achieving a balance between investments in production and infrastructure is necessary to ensure the conditions for long-term sustainable development of Russian regions.

Impact of the 100 days mission for vaccines on COVID-19: a mathematical modelling study

The COVID-19 pandemic has underscored the beneficial impact of vaccines. It also highlighted the need for future investments to expedite an equitable vaccine distribution. The 100 Days Mission aims to develop and make available a new vaccine against a future pathogen with pandemic potential within 100 days of that pathogen threat being recognised. We assessed the value of this mission by estimating the impact that it could have had on the COVID-19 pandemic. Using a previously published model of SARS-CoV-2 transmission dynamics fitted to excess mortality during the COVID-19 pandemic, we projected scenarios for three different investment strategies: rapid development and manufacture of a vaccine, increasing manufacturing capacity to eliminate supply constraints, and strengthening health systems to enable faster vaccine roll-outs and global equity. Each scenario was compared against the observed COVID-19 pandemic to estimate the public health and health-economic impacts of each scenario. If countries implemented non-pharmaceutical interventions (NPIs) as they did historically, the 100 Days Mission could have averted an estimated 8·33 million deaths (95% credible interval [CrI] 7·70-8·68) globally, mostly in lower-middle income countries. This corresponds to a monetary saving of US$14·35 trillion (95% CrI 12·96-17·87) based on the value of statistical life-years saved. Investment in manufacturing and health systems further increases deaths averted to 11·01 million (95% CrI 10·60-11·49). Under an alternative scenario whereby NPIs are lifted earlier on the basis of vaccine coverage, the 100 Days Mission alone could have reduced restrictions by 12 600 days (95% CrI 12 300-13 100) globally while still averting 5·76 million deaths (95% CrI 4·91-6·81). Our findings show the value of the 100 Days Mission and how these can be amplified through improvements in manufacturing and health systems equity. However, these investments must be enhanced by prioritising a more equitable global vaccine distribution. Schmidt Science Fellowship in partnership with the Rhodes Trust, WHO, UK Medical Research Council, Coalition for Epidemic Preparedness Innovations.

Optimal Strategies for E-Commerce Platform Supply Chain: Carbon Emission Reduction and Financing

In the context of global carbon emission reduction (CER) targets and slowing economic growth, it is imperative for suppliers to make informed choices regarding CER and financing strategies. However, limited research has explored the impact of financing strategies on CER. This paper develops a supply chain model that includes a supplier, a manufacturer, an E-commerce platform (E-C platform), and consumers with a preference for low-carbon products. The supplier sets the wholesale price, while the manufacturer controls both the production quantity and the unit amount of CER. We examine whether the manufacturer will invest in CER with sufficient capital or under various financing scenarios, namely (1) traditional production with sufficient capital (Scenario ST); (2) CER implementation with sufficient capital (Scenario SG); (3) CER implementation with E-C platform financing (Scenario EG); (4) CER implementation with bank financing (Scenario BG). Through comparative analysis, the analysis reveals that, regardless of the financing method chosen, the supplier’s profit and the manufacturer’s production quantity increase when the manufacturer invests in CER technology innovation compared to the traditional scenario. Furthermore, in terms of the manufacturer’s profit, if the service cost of bank financing exceeds a certain threshold, the manufacturer should either seek financing from the E-C platform or abandon the CER investment. Additionally, with respect to CER outcomes, Scenario BG outperforms Scenario EG. These findings provide a theoretical foundation and decision-making support for supply chain participants when addressing carbon reduction and financing strategy decisions.

Measuring Efficiency and Spillover Effects of Foreign Direct Investment in Manufacturing: An Indian Policy Perspective

Measuring Efficiency and Spillover Effects of Foreign Direct Investment in Manufacturing: An Indian Policy Perspective

Trade facilitation, market size, and supply chain efficiency of Taiwan semiconductor companies.

In an environment marked by global economic volatility and geopolitical uncertainties, the stability of Taiwan's supply chain takes on heightened importance, particularly given Taiwan's crucial role in the global semiconductor supply chain. In recent years, semiconductor companies in Taiwan have faced increasing inventory pressures, which will reduce their competitiveness and increase operational costs over the long term. Although previous studies have explored the influence of trade facilitation on macroeconomic and trade efficiencies, its specific impacts on the semiconductor industry have been less frequently addressed. This study integrates corporate inventory, trade facilitation, and geopolitical factors within a unified analytical framework to construct a model that explores mediating and moderating effects. This study conducted regression analysis on data from 52 Taiwan-listed integrated circuit companies from 2014 to 2022. Contrary to traditional findings that trade facilitation decreases inventory in other industries, it predominantly fosters inventory accumulation within Taiwan's semiconductor sector by expanding market size, thereby affecting supply chain efficiency. Moreover, geopolitical factors were found to intensify the effects of trade facilitation on corporate inventory. Elevated geopolitical risks lead to greater inventory accumulation, which ultimately threatens long-term competitiveness and diminishes the semiconductor industry's advantage in Taiwan, further influencing supply chain efficiency. Consequently, this study recommends that to more accurately forecast market size, semiconductor companies in Taiwan are encouraged to expand their manufacturing investments in Chinese mainland. Additionally, the prudent handling of cross-strait relations by the Taiwan authorities is an important strategy to mitigate geopolitical risks affecting the semiconductor supply chain.

Optimal financing strategies for low‐carbon supply chains: A Stackelberg game perspective

AbstractThis study constructs a Stackelberg game model between low‐carbon manufacturers and capital‐constrained retailers. Considering the manufacturer's financing model, the manufacturer's investment model, and the internal blended financing model, it studies the optimal wholesale price of manufacturers. This paper investigates the impact of consumers' low‐carbon preference, the financing interest rate of manufacturers, investment ratio, investment return on carbon emission reduction investment, and supply chain pricing. The conditions for low‐carbon supply chain participants to choose the best financing mode and the impact of different financing models on the performance of low‐carbon supply chains were obtained.

Water flow boiling heat transfer and pressure drop in smooth, etched, and herringbone aluminum tubes

Designing next generation heat exchangers for efficient heat transfer and minimal material consumption is required for sustainable development of society. While several heat transfer augmentation techniques are available, extended surfaces have been the most widely adopted due to their relative ease of integration and high heat transfer enhancement. However, since extended surfaces are mainly applicable for soft metals, and require significant capital investment for manufacturing, we propose scalably fabricated microstructures as an alternative and scalable heat transfer augmentation technique. Our etching-based structures are cost-effective, scalable, and applicable to a wide array of metallic tubing. The conformal microstructures, which have length scales ranging between ∼ 1 to 12 μm, are introduced through chemical etching of internal tube walls using hydrochloric acid. To test the water flow boiling performance of our etched surfaces, experiments were conducted on 0.25-inch diameter aluminum tubes over a range of mass and heat fluxes spanning 200 kg/(m2·s) <G < 380 kg/(m2·s) and 60 kW/m2 <q″ < 125 kW/m2, respectively. Using deionized water as the working fluid, an enhancement of up to 104 % in the tube-averaged heat transfer coefficient with a concurrent increase of up to 65 % in pressure drop was observed. The increase in the heat transfer coefficient and pressure drop is attributed to the microstructures increasing the surface roughness and creating additional nucleation sites for bubble entrapment. When compared to commercially available finned herringbone tubes, we observed that for certain operating conditions, the enhancement in heat transfer due to use of microstructures in smooth tubes can exceed that of the enhancement observed using un-structured herringbone tubes. However, the pressure drop due to the increased surface area and fluid flow disruption of the chevron shaped herringbone fins always exceeded the etched aluminum round tube. This work provides insights and understanding related to how chemical etching and surface structuring can be utilized as an alternative passive heat transfer enhancement technique in flow boiling applications.

Green Promotion Service Allocation and Information Sharing Strategy in a Dual-Channel Circumstance

Credit purchase enables the manufacturers in the e-commerce environment to provide pre-sales service that consumers can experience first and pay later. This paper considers demand associated with price and green promotion service level and builds four decentralized game models to study two green promotion service allocation strategies and demand forecasting information sharing strategies in a dual-channel environment. The effects of the degree of dual-channel competition and free-riding on the perfect Bayesian Nash equilibrium are studied. The results show that the retailer should actively cooperate with the manufacturer and share private forecasting information if the coefficient of channel substitution is relatively high. Sharing information will aggravate double marginalization and hurt the retailer. In addition, the retailer’s profit is positively influenced by the forecasting accuracy in four models. When the manufacturer invests in the green promotion service, the prediction accuracy hurts the manufacturer’s profit without information sharing and there is a positive impact with information sharing. In particular, when a retailer provides service, we take the consumer’s free-riding behavior into account, and we find that free-riding hurts both parties and the whole supply chain. In addition, the manufacturer’s profit is irrelevant to the prediction accuracy without information sharing and positively influenced by the accuracy with information sharing.

The moderation effect of strategic alignment on the relationship between plant investment decisions and operational performance

PurposeGiven the sudden increase in plant investments across the manufacturing sector due to recent disruptions in the global supply chain caused by the COVID pandemic, the Ukraine/Russian war, ocean piracy incidents, and others, there is a need to strategically align the investments decisions with the overall business strategy. This study aims to establish whether strategic alignment enhances the effect of plant investments on operational performance.Design/methodology/approachUsing the fifth version of the Global Manufacturing Research Group (GMRG V) dataset, we employ a structural equation model (SEM) to establish the moderating role of strategic alignment in plant investments-operational performance relationships.FindingsThe results suggest that strategic alignment enhances the positive effect of plant investments on operational performance, especially in cost, delivery, flexibility, and innovation. However, we found partial support for the moderating role of strategic alignment on quality performance.Research limitations/implicationsAlthough the study was based on the GMRG global dataset and numerous papers have been published using the same dataset, the use of a convenience sample on a select group of companies may limit the generalizability of the results. With the increase in new plant investments in computer chip manufacturing, electronics, and electrical in recent years, the findings could help corporate executives maximize the benefits of their investment decisions. Companies should ensure that their plant investment decisions are strategically aligned with their overall business strategy to achieve optimal outcomes.Practical implicationsWith the increase in new plant investments in computer chip manufacturing, electronics, and electrical in recent years, the findings could help corporate executives maximize the benefits of their investment decisions. Companies should ensure that their plant investment decisions are strategically aligned with their overall business strategy to achieve optimal outcomes.Originality/valueThe study comprehensively demonstrates that the extent of improvement in operational performance depends on how closely plant investment decisions align with the overall company strategy. Manufacturers should align major investment decisions with competitive priorities driven by market requirements to enhance operational performance.

Structural change and employment growth in India: reinterpreting “Manufacturing as an Engine of Growth”

PurposeThe present paper aims to highlight how manufacturing expansions under conditions of increasing returns, which involve the growth of intermediate goods specializations, support advanced service employment. In addition, the increasing use of manufacturing products in services highlights additional, new service sector employment opportunities.Design/methodology/approachThis paper investigates (1) the manufacturing and service interactions and (2) the investment behaviour in manufacturing using Auto-Regressive Distributed lags (ARDL) and Vector Autoregressive (VAR) models. The models allow for different specifications to study whether investment behaviour in manufacturing supports dynamic manufacturing and service interactions.FindingsThe results underpin how Kaldorian manufacturing as an engine of growth is still relevant in Indian growth and is key to achieving higher advanced employment, export-orientation and services and manufacturing nexus outcomes. What matters, though, is that manufacturing investments are to be guided mainly by intermediate goods specializations. The slowdown of these specializations, explaining the slowdown of manufacturing investment, is therefore, a concern.Originality/valueA reinterpretation of manufacturing as an engine of growth in which primacy is given to investment behaviour in technical progress functions that can support the growth of specializations in manufacturing and such specialized service employment.

Navigating Strategic Balance: CEO Big Data Orientation, Environmental Investment, and Technological Innovation in Chinese Manufacturing

In the digital age, China’s economic development is transitioning from high speed to high quality. Through the application of digital technology, China’s manufacturing industry is moving toward more environmentally friendly and sustainable innovation, which makes it of great significance to study the effect of green investment and big data on innovation. Grounded in strategic management theory, this paper examines the interplay between CEO big data orientation, environmental investment, and their joint impact on technological innovation in manufacturing enterprises. Data are extracted from annual reports of listed Chinese manufacturing companies using computer-assisted text analysis methods and evaluated with negative binomial regression. The results indicate an inverted U-shaped relationship between CEO big data orientation and technological innovation. The results further explain that as CEO big data orientation increases, enterprises with higher levels of green investment will reach the peak of technological innovation performance earlier. According to China’s intelligent manufacturing in 2035, we have proposed some methods and suggestions for green investment and big data applications.

Global North–South Reparations: Demand‐side and Supply‐side Policies with a Dynamic View of International Trade and Finance

ABSTRACTThis study begins with an overview of illustrative scenarios that historically have resulted in imbalances of economic well‐being, growth and stability which demarcate the Global South and the Global North. The authors examine alternative approaches to reparations for those structural imbalances, from monetary transfers that are more likely to have demand‐side implications to capacity‐building approaches that are more likely to affect supply‐side conditions for the Global South. Targeted supply‐side strategies lean more towards rehabilitation rather than purely compensatory measures aimed at redress for historical injustices and exploitations faced by the Global South. Economic analysis underpins a discussion of these different reparations strategies. The authors argue that a dynamic approach to understanding the impact of reparations is essential. This calls for a broader strategy to be adopted, offering unconditional support in practical areas such as industrial policy, investment in manufacturing, capacity building in research and development, and initiatives for general infrastructure development. More importantly, these policies must be guided by the needs identified by the people of the nations in the Global South. Moreover, for any reparations endeavours to have enduring effects, they must be reinforced by the elimination of current external imbalances that exist within the frameworks of international economic relations.

Artificial intelligence, inattention and liability rules

We characterize the socially optimal liability sharing rule in a situation where a manufacturer develops an artificial intelligence (AI) system that is then used by a human operator (or user). First, the manufacturer invests to increase the autonomy of the AI (i.e, the set of situations that the AI can handle without human intervention) and sets a selling price. The user then decides whether or not to buy the AI. Since the autonomy of the AI remains limited, the human operator must sometimes intervene even when the AI is in use. Our main assumptions relate to behavioral inattention. Behavioral inattention reduces the effectiveness of user intervention and increases the expected harm. Only some users are aware of their own attentional limits. Under the assumption that AI outperforms users, we show that policymakers may face a trade-off when choosing how to allocate liability between the manufacturer and the user. Indeed, the manufacturer may underinvest in the autonomy of the AI. If this is the case, the policymaker can incentivize the latter to invest more by increasing his share of liability. On the other hand, increasing the liability of the manufacturer may come at the cost of slowing down the diffusion of AI technology.

Impacts of dual carbon emission reduction technology and technology spillovers of deterioration reduction on supply chain system's performances considering government incentives and contract design

Investments in carbon emission reduction and deterioration reduction are important aspects for the firms to construct a low-carbon supply chain systems of deteriorating products with the increasing preferences of customers for environmentally friendly and fresh products. In this study we develop a two-echelon supply chain system consists of one manufacturer and one retailer. The manufacturer implements dual carbon emission reduction technology to strengthen the carbon emission reduction efficiency under cap-and-trade regulation and both manufacturer and the retailer invest in deterioration reduction technology to reduce the deterioration and increase the stock level of the fresh items. To increase the demand, the retailer takes the responsibility of promoting the low-carbon and fresh products among the customers. Deterioration reduction technology spills over from the manufacturer to the retailer. Then a differential game model is formulated and the equilibrium strategies are analysed by Stackelberg differential game approach in long term scenario. Numerical analysis has been done to analyse the theoretical results more rigorously by MATLAB software and sensitivity of some major parameters on the demand and profits of the manufacturer and the retailer have also been done to obtain some managerial insights. The impacts of implementing dual carbon emissions reduction technology and the effects technology spillovers are discussed. The results show that when the manufacturer invests in dual carbon emission reduction technology over single reduction technology, it increases the emission reduction level and hence the environmental performance and also the demand and hence economic profits of the both the supply chain members. If the deterioration reduction technology spills over from the manufacturer to retailer, it increases the profit of the manufacturer but the retailer will be beneficial when his/her marginal profit will be high. In addition, we have incorporated government subsidy on manufacturer's emission reduction investment and a cost-sharing contract on the promotional effort of the retailer in our work and then found that joint impacts of them on the supply chain system. We have shown that these two incentives provide the pareto improved solution for the supply chain system and take the supply chain members to a win-win situation as economically and environmentally. The discussions of the results of this study can be beneficial for the industries which produced deteriorating products and emits high carbon during the production process in terms of taking optimal decisions. It also gives a lesson to the government how to inspired the practitioners towards developing a sustainable system.

Analysis of financing strategies for digital technology investment under privacy concerns and competition

Digital technology improves consumption experiences and facilitates manufacturers' production of smart products. However, customer privacy concerns and market competition may negatively affect smart product sales and reduce manufacturers' investment in digital technology, particularly for innovation startups with limited funding. This raises an important question about how financing strategies affect a manufacturer's investment in digital technology under privacy concerns and competition. To solve this problem, this paper considers a supply chain in which two manufacturers sell products through a platform, one of which (M1) produces smart products by committing to investing in standard or premium digital technology and adopting platform financing or equity financing to maintain operations, and the other (M2) produces regular products. Intuition may suggest that decreasing product sales prices can stimulate consumption and increase sales. Surprisingly, we find that the sales prices and quantity of smart products decrease simultaneously with an increase in privacy concerns, in sharp contrast to regular products. Additionally, although low privacy concerns can encourage M1 to invest in premium digital technology to attract consumption and adopt equity financing to save investment costs, we find that, interestingly, the manufacturer may invest in standard digital technology through platform financing, particularly when the marginal technology utility is moderate. Finally, we find that for either standard or premium digital technology investments, platform financing can help participants achieve a triple-win result, whereas equity financing cannot. Our research provides insights into the interactions between financing strategies and digital technology investments in the context of customer privacy concerns and market competition.

Challenges Facing Small-Scale Furniture Industries in Dar es Salaam Region, Tanzania

The study evaluated the challenges Tanzania's small-scale furniture industry faced. The resource-based view and resource dependency theory were used as the study's guiding concepts. From the nation's commercial centre of Dar es Salaam, 154 furniture carpenters were chosen at random. The information was gathered via the questionnaire. The collected data was examined using a descriptive analysis. According to the findings, carpenters faced several difficulties, including a shortage of modern machine tools, inadequate working capital, low labour skills, a lack of formal workspaces, and fierce competition from imported furniture. The lack of modern machine tools prevented small and medium enterprises from producing goods of the kind needed to enter growing markets. To boost productivity, furniture production must make use of current machinery. Insufficient availability of suitable financial services had led to insufficient operating capital for investments in furniture manufacturing. The study concludes that the furniture business has a significant role in generating income and jobs. The study recommends that Governments should promote a business-friendly environment in addition to creating financial and non-financial services as well as supportive institutional infrastructure.

The Impact of Platform Information Sharing on Manufacturer’s Choice of Online Distribution Mode and Green Investment

In this study, we consider a dual-channel supply chain structure where a manufacturer invests in green products and distributes them to green-conscious consumers through an offline retailer and an online platform. The manufacturer has the flexibility to choose sales via either a wholesale mode or an agency selling mode on the online platform channel. The platform can obtain private information and decide whether to share it with the manufacturer. This study investigates the strategic interaction between the green manufacturer’s decision to use an online sales mode and the online platform’s strategy for information sharing. Our analysis reveals that under the wholesale price mode, the platform is willing to share demand information only when the manufacturer exhibits high investment efficiency. In contrast, under the agency selling mode, the platform always shares demand information regardless of the level of investment efficiency. Nevertheless, the manufacturer is discouraged from opting for the agency selling mode due to the higher commission rate. Interestingly, we observe that when the value of information is sufficiently high, the manufacturer still tends to prefer the agency selling mode, despite the added cost of the higher commission fee. Additionally, the offline retailer always benefits from the information sharing conducted by the online platform. Finally, our extended model indicates that the timing of information-sharing decisions has a significant impact on the manufacturer’s choice of mode.

Pricing and investment in manufacturing and logistics when environmental reputation matters

We consider pricing and manufacturing and logistics investment decisions by a manufacturer facing environmentally concerned consumers. Demand depends on the price and manufacturer’s environmental performance comparatively to the industry. As environmental reputation can only be built over time and emissions reduction capacity requires sustainable investments in manufacturing and logistics processes over time, our model is dynamic. The planning horizon is divided into two stages, with the endogenously determined switching time between the two happening when a predefined capacity threshold is reached. We characterize the optimal decisions in both stages and provide a series of numerical illustrations varying the model’s parameter values.Our main findings are as follows: (i) the price decreases when switching from the first to the second stage; (ii) emissions are above the industry standard during the first stage, while they are considerably below it in the second stage; (iii) the higher the capacity threshold for emissions reduction technologies, the larger the time it takes to reach it, which is costly in terms of reputation; (iv) although the consumers judge the manufacturer’s environmental performance in relative terms with respect to the industry standard, we get that an increase in this standard has a small effect on the switching date. Finally, (v) emissions reduction capacity only has a short-term effect on the manufacturer’s overall profit.

Retailer information sharing with green manufacturer encroachment in a hybrid supply chain

AbstractWe consider a hybrid supply chain with a manufacturer and an online retailer with rich demand information. The manufacturer invests in green products and sells them not only through retailers that then sell to customers (reselling) but also directly to consumers via retailers by paying a proportional fee (agency selling). The retailer first decides whether to share demand information with the manufacturer, who then decides whether to encroach. We show that a manufacturer is willing to encroach when the entry cost is small if the retailer chooses not to share information. However, with the increase in the entry cost, the manufacturer could still encroach if the retailer shares information. We also find that a manufacturer that is more efficient at producing green products is more likely to encroach. Moreover, when the entry cost is sufficiently small or large, the retailer prefers to share information with the manufacturer when the greening investment efficiency is high or the efficiency is low but the proportional fee is large. Nevertheless, when the entry cost is moderate and the competition intensity is small, sharing information is better for the retailer even if the efficiency is low and the proportional fee is small. Finally, we observe that consumer sensitivity to the direct channel, differences in agency selling price and direct selling price, and imperfect retailer information do not influence decisions in specific circumstances. Furthermore, adjusting the encroachment order or ex post sharing impacts the decision‐making, with the magnitude of impact depending on certain supply chain parameters.

Effect of risk aversion on the performance of supply chain and carbon reducing initiatives under asymmetric information

AbstractThis paper considers a supply chain in which the risk‐averse manufacturer invests in carbon emission reduction (CER) technology and the risk‐averse retailer makes green sales efforts to reduce carbon footprint. The results show that when the information is symmetrical, the two‐part tariff contract can eliminate the double‐marginalization effect. Moreover, when the information is asymmetric, the manufacturer encourages retailer to report true market size and improve green sales effort by providing an incentive contract. This menu of contract ensures the manufacturer obtains more utilities with low carbon emissions. In addition, through the analysis of risk aversion coefficients, we find that under centralized decision, with the improvement of risk aversion awareness, both supply chain players will reduce the green efforts. However, under asymmetric information, compared with the manufacturer, the retailer's higher risk aversion will have an opposite effect on the equilibrium decision‐making, utilities, and carbon footprint of the supply chain.