Trading Program Research Articles

Who should provide a trade-in service under the online agency-selling mode?

In real world practice, trade-in programs are offered by either a manufacturer or an e-commerce platform. Parties that offer a trade-in service are faced with a trade-off between trade-in rebates and the residual income. By adopting the game theory, this paper explored the selection of trade-in provider with respect to a manufacturer and an e-commerce platform. The results show that in some cases, all trade-in models generated higher manufacturing costs than models with no trade-in program. However, in other cases, not all trade-in models can cope with manufacturing costs that are higher than those associated with models that have no trade-in program. Furthermore, both above two firms will offer the trade-ins when profits which they have obtained satisfied a certain condition. We also identified an interesting phenomenon whereby the manufacturer decided whether it wanted to delegate the trade-ins to the e-commerce platform or provide it jointly. The e-commerce platform can decide whether it wants to accept the delegation or jointly offer it. This study also obtain that trade-in models makes customers get more surplus and can produce greater environmental benefits. Moreover, both the customer surplus and the environmental benefits in delegated trade-in model is the same that in jointly trade-in model.

Demand cannibalization during product rollovers in the presence of strategic customers

This paper studies how different types of demand cannibalization take place during product rollovers and their effects on a firm’s profitability. Due to continuous product upgrades, demand cannibalization among various generations of products has become a common practice, raising interesting investigations from professionals and academics. Within this context, we model firms’ and customers’ decision-making as a two-period sequential game and derive equilibrium results under a dual rollover strategy, with and without a trade-in program. We find that demand cannibalization is essentially caused by customers’ strategic comparison of available purchase options. Our analysis further reveals that both the cannibalization effect and the postponement effect resulting from customers’ waiting for upgraded products are necessary for firms to improve profits. On the contrary, the postponement effect due to waiting for a discount is entirely detrimental to the firm. We propose effective launch strategies to avoid unfavorable demand cannibalization under different conditions. In addition, offering trade-in programs helps not only suppress strategic waiting, but also foster demand for an upgraded product. These strategies are particularly effective when the firm holds a greater quantity of inventory or when the degree of incremental innovation is high.

Environmental Regulation and Access to Credit

AbstractWe show that climate priorities codified in regulations significantly impact firms’ access to credit, especially long‐term credit, an important financial resource required for achieving business viability and sustainability goals. Following the implementation of a prominent cap‐and‐trade programme aimed at controlling nitrogen oxides (NOx) in the United States (the NOx Budget Trading Program, NBP), manufacturers experienced decreased debt maturity structures, driven by reduced access to long‐maturity debt, but did not alter their use of short‐term debt or trade credit. The NBP's effect on long‐term credit is more pronounced for firms with higher degrees of electricity intensity, financial constraints, information frictions or rollover risk. It ultimately led to deteriorating firm value and operating performance. Increased energy costs and elevated operating leverage explain firms’ reduced access to long‐term credit. Our findings highlight the potential unintended consequences of policy instruments designed to boost a specific aspect of sustainability and the complex nature of managing corporate financial and sustainability goals.

Optimal trade-in programs for quality differentiated recycled products

Prior research mostly focuses on traditional trade-in programs where there is no up-front fee. Motivated by recent industrial practice that firms implement quality differentiated trade-in programs with up-front fees (TF programs), we investigate three types of TF programs: only recycling low-quality old products, only recycling high-quality old products, and recycling low- and high-quality old products. Compared with the traditional trade-in model, the firm sets a lower selling price in TF models. Specifically, when the consumers’ value discount for used products is low, the selling price in the TF model that recycles low- and high-quality old products is the lowest; when the value discount is high, the selling price in the TF models that recycles low- and high-quality old products or only recycle low-quality old products may be the lowest. Interestingly, we find that all types of TF programs lead to lower trade-in rebates for replacement consumers than the traditional trade-in program. The firm with the TF program that recycles low- and high-quality products serves most consumers and charges the highest recycling quantity. Finally, we extend the models and verify the robustness of our main conclusions.

Trade-in strategies in closed-loop supply chain when considering manufacturer entrustment behavior and wholesale price contract

Many enterprises are implementing trade-in programs through multiple methods, but some lack experience or insufficient conditions to carry out the trade-in program. The previous literature did not consider the impacts of the manufacturer authorizing the third-party information platform (3IP) to implement the trade-in strategy for each member of the closed-loop supply chain. To address this gap, we established three models based on consumer choice behavior: (1) the benchmark model without trade-in strategy; (2) the trade-in model with manufacturer entrustment behavior; (3) the extension model with wholesale price contract. We obtained and compared the equilibrium solutions of the three models. Our results indicate that, compared to the case where there is no entrustment, the manufacturer’s profit is higher if they entrust the 3IP to implement the trade-in program under certain conditions (which is related to the proportion of primary and replacement consumers in the market). Under reasonable circumstances, we find that introducing a wholesale price contract can benefit the manufacturer and increase the profit of the 3IP, stimulate the 3IP to carry out trade-in better, and achieve a win-win situation. Some numerical examples are provided to explain these findings further.

Trade-In Programs in the Fashion Industry: A Win-Win Sustainability Strategy for Consumers and Brands

The fashion industry is renowned for its negative impact on the environment. To mitigate the adverse effect, some companies have recently adopted the circular economy model, which introduces used clothes in good condition back into the cycle through trade-in programs. Giving used garments a second life helps reduce the company’s carbon footprint and waste. It also provides consumers with an affordable and sustainable option, which is consistent with the growing trend of eco-conscious consumerism. In this study, we aim to explore consumers’ perceptions of trade-in programs in the fashion industry. We also examine how companies can leverage these programs as a powerful strategic tool to build brand trust and brand affect among younger generations (such as Gen Z and Millennials). This research draws upon different literature streams on signaling theory, brand trust, and brand affect. Our findings hold significant value for managers who wish to create strategically effective trade-in programs as part of their Corporate Social Responsibility initiatives.

The impact of SO2 emissions trading scheme on pollution abatement and labor market for industrial enterprises in China

To cope with the emissions permit trading program, industrial firms have to change production decisions, which may affect their pollution discharge, labor demand, and workers’ wage earnings. Using a time-varying difference-in-differences framework together with robustness checks, this research explores the impacts of the SO2 emissions trading scheme (SETS) on SO2 emissions, employment, and wages of industrial firms in China. It was noted that the program resulted in a remarkable decline not only in SO2 emissions but also in labor demands and wages. The mechanism analyses further show that emissions reduction is mainly driven by fossil energy input decrease rather than by desulfurization technology. The negative effects of employment and wages are driven by the negative output effect and insufficient technology rather than by the environmental substitute effect. Our findings contribute to the improvement of the market-oriented environmental permit trading program and development of regulated firms in developing countries.

Deregulation of short-selling and green innovation of enterprises: quasi-natural experiment of margin trading policy

PurposeThe reform and opening-up of capital market is valued for promoting sustainable development, while its impact presented as the form of deregulation of short-selling on the green innovation of enterprises in developing countries remains unclear. The purpose of this study is to outline the significance of gradual reform of financial markets in developing countries for low-carbon transformation and provide implications for achieving carbon peaking and carbon neutrality goals.Design/methodology/approachBased on the green subdivided patent data and financial data of China’s A-share listed companies, this paper takes the implementation of securities margin trading program as a quasi-natural experiment and applies the difference-in-differences (DID) model to examine the impact of deregulation of short-selling constraints on the enterprises’ green transformation.FindingsThe findings reveal that the initiating securities margin trading program significantly enhances the green innovation performance of enterprises. These findings are valid after performing a series of robustness tests such as the parallel trend test, the placebo test and the methods to exclude other policy interference. Mechanism analyses demonstrate a two-faceted effect of the securities margin trading program on the green innovation of enterprises, in which short-selling policy increases the pressure on capital market deregulation and meanwhile induces the environmental protection investment. The heterogeneity results demonstrate that the impulsive effect imposed by securities margin trading program is more significant in experimental group samples with characteristics of lower financing constraints, belonging to heavy polluting industries and possessing better environmental supervision capability.Originality/valueFirst, previous studies have focused on the impact of financial policies implemented by banking institutions on the green innovation of enterprises, but few literatures have explored the validity of relaxing short-selling restrictions or opening the capital market in the field of enterprise’s green transformation in developing country. From the view of securities market reform, this paper broadens the incentive and supervision effects of the relaxation of short-selling control on enterprise’s green innovation performance after the implementation of securities financing and securities lending policy in China’s capital market. Second, previous studies have explored the impact of command-and-control environmental regulations, as well as market-incentivized environmental regulations such as green finance, low-carbon pilots and environmental tax reform, on the green transition of enterprises. Recently the role of the securities market in the green development of enterprises has received more attention in academia. The pilot of margin financing and securities lending is essentially a market-incentivized regulatory tool, but there is few in-depth research on how it affects the green innovation of enterprises. This paper enriches the research on whether the market incentive financial regulation policy can contribute to the green transformation of enterprises under the Porter hypothesis. Third, some previous studies used the ordinary panel regression model to explore the impact of financial policy on enterprise’s innovation performance. However, due to the potential endogenous problems of the estimated model, it might get biased conclusions. Therefore, based on the method of quasi-natural experiment, this paper selects the margin trading pilot policy as an exogenous shock to solve the endogenous or reverse causality problem in traditional measurement model and applies the DID model to study the relationship between core indicator variables.

Optimal decisions for hybrid manufacturing and remanufacturing with trade-in program and carbon tax

With the practical implementation of carbon taxes and the adoption of trade-in programs, the decision environment for manufacturing and remanufacturing has become increasingly complicated. Taking the carbon tax and the trade-in program into consideration, this study develops manufacturing-remanufacturing models for two market scenarios (i.e., emerging market and mature market) when cores for remanufacturing are limited by used product collection, and finds that the determining factors of optimal decisions are different across the two market scenarios. In addition to the carbon tax and carbon emissions of remanufactured product, the optimal decisions are also affected by the segment size of the replacement consumer in the mature market. Furthermore, we find that carbon tax policy does not always encourage the manufacturer to work on remanufacturing, and it may prevent remanufacturing under certain circumstances. Moreover, the impacts of supply chain parameters on optimal decisions, total carbon emissions, and profits are explored. The carbon tax has similar impacts across the two market scenarios; however, the carbon emissions of remanufactured product and the remaining value of the used product show different impacts. From the social welfare perspective, the optimal carbon tax depends on the regulator’s environmental concern.

Analysis of Influencing Factors on the Value of Carbon Assets in China Under the Background of Double Carbon — Take the Pilot Carbon Emission Trading Program in Guangdong Province as an Example

In recent years, with the rapid development of the global industrial economy, carbon dioxide emissions, the greenhouse effect, and other environmental problems have become increasingly obvious, the development of a low-carbon economy has become the goal pursued by all countries in the world, carbon market trading has also emerged and developed. With the continuous development of the carbon market, carbon assets are playing an increasingly important role for enterprises, and the assessment of carbon assets has greater potential for development prospects. However, at this stage, there are few studies on the value of carbon assets in the field of assessment, and the studies on the influencing factors of the value of carbon assets are more focused on the analysis of the price of carbon emission rights. This paper takes carbon asset trading as the background and carbon emission trading pilot in Guangdong Province as an example and selects five indicators from different fields to establish a linear regression model to analyze the influencing factors of carbon emission rights price.

Optimizing the emission control policies and trade-in program effects: A carbon-constrained closed-loop supply chain network model

Economic development and human activities affect the natural environment severely. The government has promogulated several policies such as carbon caps and trading scheme, government subsidies, and green credit to control emissions. Accordingly, enterprises should profit on the premise of undertaking social responsibilities, green technology and trade-in programs are two ways to benefit the environment. However, the interaction between regulations and emission abatement measures is largely unknown. A carbon-constrained closed-loop supply chain network model is proposed to discuss the joint effect of the policies and operational measures. The model is constructed under two scenarios, i.e., Manufacturer-led mode and Retailer-led mode. Sensitivity analysis is conducted to compare the scenarios. The results show that although the retailer-led mode promotes resource recovery and supply chain performance, it weakens manufacturers’ profit. We find that the carbon caps and trading scheme is effective in emission reduction when the initial carbon quota is relatively less, which indicates the importance of carbon caps allocation method. The government subsidies stimulate green manufacturers to do more emission reduction efforts enhancing sustainability. The subsidy on green products has more obvious effect on coordinating economic and environmental targets. We also reveal environmental awareness positively affects the emission abatement level. Finally, we extend our models to two special cases with (i) generalization of customers and (ii) different production cost function forms. The main conclusions remain valid in the special cases. The theoretically derived conclusions contribute to the operational research literature and will guide policymakers and enterprises in the manufacturing industry.

Air pollution-induced brain drain: Evidence from inventor mobility

This study attempts to examine the impact of air pollution on inventor mobility. Specifically, we find that the number of polluting facilities surrounding inventors' workplaces significantly affects their mobility. To establish causality, we introduce the NOx Budget Trading Program of 2003 as an exogenous shock and find consistent results. We further demonstrate that the air pollution drives inventors to relocate to areas with better air quality. We present several economic mechanisms underlying our findings, including inventors' career concerns, knowledge generality, and knowledge complementarity. Finally, we show that the net outflow of inventors negatively affects firms' innovation outputs.

Impact of product sharing and heterogeneous consumers on manufacturers offering trade-in programs

Many large manufacturers offer trade-in programs as a way to protect the environment and to generate greater revenues by attracting and retaining consumers. However, the emergence of product-sharing platforms alters consumers’ purchase decisions. We develop an analytical framework for examining how manufacturers that offer trade-in programs can respond to product-sharing markets and heterogeneous consumers. Two classes of consumers are considered: myopic and strategic. This study establishes that a sharing market reduces the manufacturer’s profit when consumers are strategic rather than myopic. Moreover, a smaller salvage value will always (resp. sometimes) boost the manufacturer’s profit when consumers are myopic (resp. strategic). The manufacturer’s profit increases with the product’s depreciation rate and maintenance cost when consumers are myopic, but it may be decreasing in the depreciation rate and maintenance cost when consumers are strategic. We show that these unexpected results follow from the interaction – under certain parameters – between a propelling effect (that encourages consumers to trade in old products) and a hauling effect (that discourages consumers from buying new products). Finally, the manufacturer derives more profit from strategic than from myopic consumers regardless of whether or not there is a product-sharing market.

Self-building or cooperating with a service platform: how should a dual-channel firm implement a trade-in program?

Self-building or cooperating with a service platform: how should a dual-channel firm implement a trade-in program?

Does Carbon Emissions Trading Policy Improve Inclusive Green Resilience in Cities? Evidence from China

With the impact of external globalization uncertainties and the pressure of internal national environmental policies and markets, maintaining inclusive green resilience while coordinating economic, environmental, and social systems is critical for achieving green and sustainable urban development. We define inclusive green resilience for cities in this research and build a system of inclusive green resilience indicators. The DID model and entropy approach were used to examine the impact of carbon trading policies on inclusive green resilience in 184 representative Chinese cities from 2008 to 2018, and PSM-DID was utilized for further validation. According to the findings of the study, carbon emissions pricing policies can considerably increase inclusive green resilience in cities. Mechanism verification demonstrates that carbon trading programs improve inclusive green resilience in cities through industrial restructuring, technical innovation capability, and employment benefits. According to the city heterogeneity study, the implementation of the carbon emissions trading system has a scale effect and significant urban functional differences, and its impact on inclusive green resilience of cities is greater in large and medium-sized cities and non- resource-based cities. This research offers a new way of thinking about inclusive green resilience as well as empirical data for future sustainable policy development.

Assessing and improving the outcomes of nonpoint source water quality trading policies in urban areas: A case study in Virginia

Nonpoint source (NPS) water quality trading (WQT) is a market-based approach to improving water quality. Past work has shown that these programs could increase localized pollutant loadings, in part by exporting water quality controls from urban to rural areas. Virginia's NPS WQT program has enabled thousands of transactions and may provide a model for other programs, but its impacts on urban water quality have not been thoroughly assessed. We quantify the impact of NPS WQT purchases in Virginia on water quality and hydrology in an urban catchment. We go on to assess outcomes of a policy alternative where buyers and sellers are collocated in the urban catchment. Simulation results show that NPS WQT increased total phosphorus (TP) loading by an average of 0.8 lbs TP/year for each 1.0 offsite credits purchased in the analyzed catchment. The TP loading increased in years with greater rainfall, such that TP loads were increased by up to 1.2 lbs TP/year for each offsite credit purchased. These loading increases may or may not be acceptable, depending on the cumulative number of purchases within an urban catchment and existing local water quality issues. In our policy alternative with buyers and sellers collocated in the catchment, we found that the TP increase from development was completely offset at the catchment scale, with a decrease of 4.3 lbs TP/year for each 1.0 credits purchased. This suggests that credits awarded for urban mitigation practices are undervalued compared with water quality requirements for credit purchasers. This undervaluation is a result of the Virginia trading program using one approach to compute the credit value for buyers and a different approach to compute the credit value for sellers. We demonstrate how using a single model to determine both buyer and seller credit values in urban areas could provide greater transparency and mitigate the risk of urban pollution hot spots. This work demonstrates the importance of consistency in the scale of pollutant load calculations between buyers and sellers for NPS WQT, and contributes novel insight into the implications of WQT for urban NPS pollution.

Iso Quality Management System Implementation 29993:2017 concerning Facilitator Clauses in the Program Trade Export Training LPK Global Talent Education Incubator

The first problem is the lack of compliance with the Quality Management System ISO 29993:2017 which should be a reference for facilitators in carrying out the learning process in job training institutions. The second problem is that there is no identification of improvement efforts that must be carried out by job training institutions in order to achieve the goals of the institution's vision and mission. The purpose of this study was to find out how LPK Global Talent Education Incubator's efforts in implementing ISO 29993:2017 in the facilitator clause in the export trade training program. This study uses a qualitative method with a case study approach. Qualitative research with a case study approach is intended to study in depth the background of the situation and the current position which is what it is. The research stages included: Research, Observation and in-depth interviews. This research used a population of 3 management, facilitators and alumni training participants. The sampling technique is a saturated sample, namely 3 people. The data collection stage consists of observation techniques and interview techniques. The steps taken in the data checking stage were carried out after interviews and observations. The method of analysis for this research is observation and interviews from the data. The results of the research and analysis with data processing show that the Global Talent Education Incubator Education Institute has implemented the existing quality management system, but something must still be evaluated in running the quality management system. The author's suggestion is that in carrying out the learning process the facilitator should better prepare himself both methodologically and technically adapted to the learning environment and pay more attention to the basic requirements of the facilitator and the learning process so that nothing is missed regarding the existing quality management.

Analysis of competitive manufacturers’ collection decisions given cross-shareholding and capital constraints

Entrusting a third party and implementing a trade-in program are two main ways for manufacturers to collect used products. By establishing two closed-loop supply chain competition models, this study analyses the co-existence conditions of third-party collection and trade-in collection adopted by competitive manufacturers M1 and M2 respectively. Then, based on an analysis of the impact of R&D improvement on the collection decision, the impacts of horizontal cross-shareholding and financing parameters on the collection decision and profit are explored, respectively. The results show that when consumers are low-value customers who prefer cash back over purchasing a new product, competitive manufacturers with different collection channels consider improving their R&D level. The R&D improvement of M1 reduces the trade-in price and the third-party collection price, and shrinks the collection market. However, the R&D improvement of M2 increases the trade-in price and the third-party collection price. In addition, the trade-in collection market shrinks and the third-party collection market increases. In the case of cross-shareholding, the increase of M1's share helps reduce the trade-in price and the third-party collection price, while the increase of M2's share helps increase the trade-in price and the third-party collection price. In factoring financing, the increase in the factoring rate reduces the total collection quantity in the collection market, but helps improve the earnings of M2 from the collection of used products. In the case of equity financing, the increase in equity not only increases the total amount of collection, but also the earning of M1 from the collection of used products.

Road map for sustainable and effective carbon pricing: bridging the gap of realities and ambitions.

An increase in policy ambition is needed to close the gaps related to climate change mitigation and those required to meet the targets of Paris Agreement. This article examines the contemporary situation of carbon pricing and suggests how carbon costs would help countries adopt comprehensive climate policies. This paper explores the carbon pricing imitative across different regions and the associated issues and proposes how to format holistic, ambitious approaches for effective implementation of carbon pricing. The carbon taxes and emission trading programs are the primary tools for implementation costs. Carbon taxes, fuel taxes, subsidies for fossil energy, and emission trading systems (ETSs) all contribute to these costs. Different countries have adopted different approaches to adopt and mitigate the adverse effect of carbon emissions, but coordinated and integrated efforts are needed. This paper emphasizes the effective carbon pricing and integrating role of finance departments in climate policy; new synergies can be developed to boost government agencies' ability to implement climate policy. Governments may increase their involvement in carbon pricing beyond direct carbon pricing if they implement efficient carbon pricing. Governments, international organizations, and civil society can all play a role in pushing for effective carbon prices to encourage more ambitious targets. Furthermore, the article stresses the need for open communication and a proper understanding of carbon pricing potential to implement climate policy.

Examining the Chinese mobile phone industry in the reverse supply chains

This research aims to develop a simulation model for the Chinese mobile phone industry's reverse supply chain and analyses the effects of the trade-in program and the government subsidy on the system’s behaviour. We adopt a system dynamics (SD) modelling approach, an excellent tool for studying dynamic processes in which new decisions have to be made, and new policies appear. Key factors and their relationships are identified through literature review and observation. The research outcomes conclude that the trade-in program and the government subsidy have different effects on the system behaviour when collectors compete by taking different acquisition and recycling strategies. The former has a significantly positive impact on the formal recycling industry's economic performance, while the latter has a critical influence on alleviating the problem of uncontrollable disposal. The original primary contribution is to offer an observation and a comparison regarding the possible effects of the trade-in program and government subsidy on a reverse supply chain in the mobile phone industry when a competitive collection is involved.