How to balance economic profits and environmental protection: The impacts of cash hedging on remanufacturing firms

The popularity of the circular economy attracts more attention to balance environmental and economic impacts. Many supply chain remanufacturing firms have started to use the cash flow to invest in cost-reduction technologies to increase profits. However, the uncertainty of cash flow significantly af...

Full description

Saved in:
Bibliographic Details
Published inInternational journal of production economics Vol. 258; p. 108783
Main Authors Liu, Jing, Xia, Senmao, Wang, Zhaoxing, Nie, Jiajia, Ameen, Nisreen, Yan, Cheng, Lim, Ming K.
Format Journal Article
LanguageEnglish
Published Elsevier B.V 01.04.2023
Subjects
Circular economy
Cost-reduction technology innovation
Environment
Hedging
Remanufacturing
Hedging
Environment
Circular economy
Cost-reduction technology innovation
Remanufacturing
Online AccessGet full text

Cover

More Information
Summary:The popularity of the circular economy attracts more attention to balance environmental and economic impacts. Many supply chain remanufacturing firms have started to use the cash flow to invest in cost-reduction technologies to increase profits. However, the uncertainty of cash flow significantly affects the technology investment effectiveness, and therefore, some firms attempt to adopt cash hedging strategies to mitigate the uncertainty. This study investigates the impacts of cash hedging on remanufacturing firms' profits and the environment through the lenses of cost-reduction technologies investments. The proposed nonlinear programming models were drawn on cash hedging and risk management theory. Empirical regression analysis was conducted using longitudinal datasets of listed Chinese remanufacturing firms for ten years ranging from 2010 to 2019. Different from the traditional wisdom which argues that cash hedging has a single effect (i.e., positive, negative, or no impact) on corporate economic performance, this paper's results indicate that the impact of cash hedging on corporate profits varies in different conditions; Further, this study is one of the first to identify some interesting conditions, in which cash hedging can bring along remanufacturing firms with profits while protect environment. This study provides insightful suggestions for the manufacturer's and government's policy design.
ISSN:0925-5273
1873-7579
DOI:10.1016/j.ijpe.2023.108783