IDEAS home Printed from https://ideas.repec.org/a/eee/riibaf/v57y2021ics0275531921000209.html
   My bibliography  Save this article

Implications for enterprise to adopt cleaner technology: From the perspective of energy market and commodity market

Author

Listed:
  • Guo, Jian-Xin
  • Zhu, Kaiwei

Abstract

Business-related decision making seems more difficulty than ever before. Diffusion signals from different market make it difficult for policy makers to adopt clear strategy, and the lack of clear coping strategies will hinder stakeholders in the market from making strong investment decisions as early as possible. To cope with this problem, we propose an innovative model that can analyze production decisions and technology adoption of enterprises been faced with two coupled markets. With the help of this quantitative method, we answer the basic question of the investment path and technology adoption time in a class of enterprises, and further analyze which factors in the related markets have a more obvious impact on the decision. A novel feature of this work is that we characterize the connection mechanism of the two markets so that we can investigate the interaction between enterprises’ decisions and the markets’ signals. Our stochastic model allows for quite general dependence on energy fuel price and investment choice. Turning to the special Monte-Carlo based method, we can determine the optimal time to invest as well as the switching time. We applied this framework to an empirical case of heating technology on a highway, and found that both consumer preferences and energy prices have a significant impact on enterprise's investment strategy, but consumer preferences have a greater impact on the transition time for cleaner technologies. Also, the results have potentially important policy implications and can provide a rationale for supporting cleaner technologies.

Suggested Citation

  • Guo, Jian-Xin & Zhu, Kaiwei, 2021. "Implications for enterprise to adopt cleaner technology: From the perspective of energy market and commodity market," Research in International Business and Finance, Elsevier, vol. 57(C).
    • Handle: RePEc:eee:riibaf:v:57:y:2021:i:c:s0275531921000209
    DOI: 10.1016/j.ribaf.2021.101399
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0275531921000209
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ribaf.2021.101399?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Doni, Nicola & Ricchiuti, Giorgio, 2013. "Market equilibrium in the presence of green consumers and responsible firms: A comparative statics analysis," Resource and Energy Economics, Elsevier, vol. 35(3), pages 380-395.
    2. Maria Cunha-e-Sá & Ana Reis, 2007. "The Optimal Timing of Adoption of a Green Technology," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 36(1), pages 35-55, January.
    3. Jaakkola, Niko & van der Ploeg, Frederick, 2019. "Non-cooperative and cooperative climate policies with anticipated breakthrough technology," Journal of Environmental Economics and Management, Elsevier, vol. 97(C), pages 42-66.
    4. Zhang, Linghong & Wang, Jingguo & You, Jianxin, 2015. "Consumer environmental awareness and channel coordination with two substitutable products," European Journal of Operational Research, Elsevier, vol. 241(1), pages 63-73.
    5. Liu, Zugang (Leo) & Anderson, Trisha D. & Cruz, Jose M., 2012. "Consumer environmental awareness and competition in two-stage supply chains," European Journal of Operational Research, Elsevier, vol. 218(3), pages 602-613.
    6. Li, Shuai & Cai, Hubo, 2017. "Government incentive impacts on private investment behaviors under demand uncertainty," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 101(C), pages 115-129.
    7. Naito, Yuta & Takashima, Ryuta & Kimura, Hiroshi & Madarame, Haruki, 2010. "Evaluating replacement project of nuclear power plants under uncertainty," Energy Policy, Elsevier, vol. 38(3), pages 1321-1329, March.
    8. Jean-Paul Décamps & Thomas Mariotti & Stéphane Villeneuve, 2006. "Irreversible investment in alternative projects," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 28(2), pages 425-448, June.
    9. Alain Ayong Le Kama & Aude Pommeret & Fabien Prieur, 2014. "Optimal Emission Policy under the Risk of Irreversible Pollution," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 16(6), pages 959-980, December.
    10. Elinor Ostrom, 2000. "Collective Action and the Evolution of Social Norms," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 137-158, Summer.
    11. Pietro Giovanni, 2014. "Environmental collaboration in a closed-loop supply chain with a reverse revenue sharing contract," Annals of Operations Research, Springer, vol. 220(1), pages 135-157, September.
    12. Gollier, Christian & Proult, David & Thais, Francoise & Walgenwitz, Gilles, 2005. "Choice of nuclear power investments under price uncertainty: Valuing modularity," Energy Economics, Elsevier, vol. 27(4), pages 667-685, July.
    13. Alain Ayong Le Kama & Aude Pommeret & Fabien Prieur, 2014. "Optimal Emission Policy under the Risk of Irreversible Pollution," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 16(6), pages 959-980, December.
    14. Sengupta, Aditi, 2015. "Competitive investment in clean technology and uninformed green consumers," Journal of Environmental Economics and Management, Elsevier, vol. 71(C), pages 125-141.
    15. Bobtcheff, Catherine & Villeneuve, Stéphane, 2010. "Technology choice under several uncertainty sources," European Journal of Operational Research, Elsevier, vol. 206(3), pages 586-600, November.
    16. Prudence Dato, 2017. "Energy Transition Under Irreversibility: A Two-Sector Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(3), pages 797-820, November.
    17. Wen, Wen & Zhou, P. & Zhang, Fuqiang, 2018. "Carbon emissions abatement: Emissions trading vs consumer awareness," Energy Economics, Elsevier, vol. 76(C), pages 34-47.
    18. Sendstad, Lars Hegnes & Chronopoulos, Michail, 2016. "Sequential Investment in Emerging Technologies under Policy Uncertainty," Discussion Papers 2016/10, Norwegian School of Economics, Department of Business and Management Science.
    19. Gil-Moltó, Maria José & Varvarigos, Dimitrios, 2013. "Emission taxes and the adoption of cleaner technologies: The case of environmentally conscious consumers," Resource and Energy Economics, Elsevier, vol. 35(4), pages 486-504.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Prudence Dato, 2018. "Investment in Energy Efficiency, Adoption of Renewable Energy and Household Behavior: Evidence from OECD Countries," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    2. Wen, Wen & Zhou, P. & Zhang, Fuqiang, 2018. "Carbon emissions abatement: Emissions trading vs consumer awareness," Energy Economics, Elsevier, vol. 76(C), pages 34-47.
    3. Dongdong Li, 2022. "Dynamic optimal control of firms' green innovation investment and pricing strategies with environmental awareness and emission tax," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(4), pages 920-932, June.
    4. Ouardighi, Fouad El & Sim, Jeong Eun & Kim, Bowon, 2016. "Pollution accumulation and abatement policy in a supply chain," European Journal of Operational Research, Elsevier, vol. 248(3), pages 982-996.
    5. Xia, Senmao & Ling, Yantao & de Main, Leanne & Lim, Ming K. & Li, Gendao & Zhang, Peter & Cao, Mengqiu, 2022. "Creating a low carbon economy through green supply chain management: investigation of willingness-to-pay for green products from a consumer’s perspective," LSE Research Online Documents on Economics 116895, London School of Economics and Political Science, LSE Library.
    6. Ouyang, Jianjun & Fu, Jie, 2023. "Energy-saving and subsidy policy decisions for double competition manufacturers," Energy Economics, Elsevier, vol. 117(C).
    7. Adkins, Roger & Paxson, Dean, 2019. "Rescaling-contraction with a lower cost technology when revenue declines," European Journal of Operational Research, Elsevier, vol. 277(2), pages 574-586.
    8. Takuro Miyamoto, 2023. "Green product diffusion and innovation in supply chains," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 25(3), pages 331-353, July.
    9. Hui Li & Chuanxu Wang & Meng Shang & Wei Ou, 2017. "Pricing, Carbon Emission Reduction, Low-Carbon Promotion and Returning Decision in a Closed-Loop Supply Chain under Vertical and Horizontal Cooperation," IJERPH, MDPI, vol. 14(11), pages 1-26, November.
    10. Chunhai Yu & Yingxiang Zhang & Ling Liu & Thomas W. Archibald, 2024. "Low-carbon supply chain strategy and contract coordination considering manufacturers′ fairness concerns," Operational Research, Springer, vol. 24(4), pages 1-51, December.
    11. Liangjie Xia & Yongwan Bai & Sanjoy Ghose & Juanjuan Qin, 2022. "Differential game analysis of carbon emissions reduction and promotion in a sustainable supply chain considering social preferences," Annals of Operations Research, Springer, vol. 310(1), pages 257-292, March.
    12. Yuanqiao Chen & Zhisong Chen & Jianhui Peng, 2021. "How does emission right-based lending contribute to sustainable production and green financing? A modelling study," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(9), pages 13945-13972, September.
    13. Aznar-Márquez, J. & Ruiz-Tamarit, J.R., 2017. "Sustainable growth and environmental catastrophes," Mathematical Social Sciences, Elsevier, vol. 89(C), pages 83-91.
    14. Peng Liu & Ying Chen, 2022. "Differential Game Model of Shared Manufacturing Supply Chain Considering Low-Carbon Emission Reduction," Sustainability, MDPI, vol. 14(18), pages 1-24, September.
    15. Trung-Hieu Tran & Yong Mao & Peer-Olaf Siebers, 2019. "Optimising Decarbonisation Investment for Firms towards Environmental Sustainability," Sustainability, MDPI, vol. 11(20), pages 1-19, October.
    16. Xiutian Shi & Xiaoli Zhang & Ciwei Dong & Subin Wen, 2018. "Economic Performance and Emission Reduction of Supply Chains in Different Power Structures: Perspective of Sustainable Investment," Energies, MDPI, vol. 11(4), pages 1-16, April.
    17. Doni, Nicola & Ricchiuti, Giorgio, 2013. "Market equilibrium in the presence of green consumers and responsible firms: A comparative statics analysis," Resource and Energy Economics, Elsevier, vol. 35(3), pages 380-395.
    18. Jain, Shashi & Roelofs, Ferry & Oosterlee, Cornelis W., 2014. "Decision-support tool for assessing future nuclear reactor generation portfolios," Energy Economics, Elsevier, vol. 44(C), pages 99-112.
    19. Uşar, Damla Durak & Denizel, Meltem & Soytaş, Mehmet Ali, 2019. "Corporate sustainability interactions: A game theoretical approach to sustainability actions," International Journal of Production Economics, Elsevier, vol. 218(C), pages 196-211.
    20. Shoufeng Ji & Dan Zhao & Xiaoshuai Peng, 2018. "Joint Decisions on Emission Reduction and Inventory Replenishment with Overconfidence and Low-Carbon Preference," Sustainability, MDPI, vol. 10(4), pages 1-21, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:riibaf:v:57:y:2021:i:c:s0275531921000209. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ribaf .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.