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Xing Yin
School of Management Science and Engineering, Nanjing University of Finance and Economics, Nanjing 210023, China

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Journal article
Published: 19 February 2020 in Sustainability
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With a rigid requirement for environment protection, governments need to make appropriate policies to induce firms to adopt green technology in consideration of the rapidly increasing demand for environmentally friendly products. We investigated the government policy from the perspective of a supply chain, which consisted of the upstream government (she) and the downstream manufacturing firm (he). The government decided on the policy (tax or subsidy) to maximize the social welfare, while the firm decided on the greenness level of the product, which affects the consumers’ choice behavior and hence his own demand. Assuming else being equal, the government should adopt the tax policy if consumers are very sensitive to the greenness, the cost of greening is high, or the negative impact due to carbon emission is large, and subsidize the firm otherwise. We also conduct some numerical studies when price is endogenous. The main insights can be carried over.

ACS Style

Xing Yin; Xiaolin Chen; Xiaolin Xu; Lianmin Zhang. Tax or Subsidy? Optimal Carbon Emission Policy: A Supply Chain Perspective. Sustainability 2020, 12, 1548 .

AMA Style

Xing Yin, Xiaolin Chen, Xiaolin Xu, Lianmin Zhang. Tax or Subsidy? Optimal Carbon Emission Policy: A Supply Chain Perspective. Sustainability. 2020; 12 (4):1548.

Chicago/Turabian Style

Xing Yin; Xiaolin Chen; Xiaolin Xu; Lianmin Zhang. 2020. "Tax or Subsidy? Optimal Carbon Emission Policy: A Supply Chain Perspective." Sustainability 12, no. 4: 1548.