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...
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Published in | International journal of production economics Vol. 258; p. 108783 |
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Main Authors | , , , , , , |
Format | Journal Article |
Language | English |
Published |
Elsevier B.V
01.04.2023
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Subjects | |
Online Access | Get full text |
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Abstract | 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. |
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AbstractList | 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. |
ArticleNumber | 108783 |
Author | Ameen, Nisreen Liu, Jing Xia, Senmao Lim, Ming K. Wang, Zhaoxing Nie, Jiajia Yan, Cheng |
Author_xml | – sequence: 1 givenname: Jing surname: Liu fullname: Liu, Jing email: 1620926415@qq.com organization: School of Management, Guangzhou University, Guangzhou, 510006, China – sequence: 2 givenname: Senmao orcidid: 0000-0003-2637-6201 surname: Xia fullname: Xia, Senmao email: xsenm6688@sina.com, s.xia@surrey.ac.uk organization: Surrey Academy for Blockchain and Metaverse Applicartions & Surrey Business School, University of Surrey, Guildford, GU27XH, UK – sequence: 3 givenname: Zhaoxing orcidid: 0000-0002-8834-3168 surname: Wang fullname: Wang, Zhaoxing email: zhaox.uk@hotmail.com organization: School of Public Policy and Management, Tsinghua University, Beijing, 100084, China – sequence: 4 givenname: Jiajia surname: Nie fullname: Nie, Jiajia email: niejiajia@home.swjtu.cn organization: School of Economics and Management, Southwest Jiaotong University, Chengdu, 610031, China – sequence: 5 givenname: Nisreen orcidid: 0000-0002-1794-9103 surname: Ameen fullname: Ameen, Nisreen email: Nisreen.Ameen@rhul.ac.uk organization: School of Business and Management, Royal Holloway University of London, Egham Hill, Egham, TW20 0EX, UK – sequence: 6 givenname: Cheng orcidid: 0000-0002-3569-6859 surname: Yan fullname: Yan, Cheng email: Cheng.Yan@essex.ac.uk organization: Essex Business School, University of Essex, Colchester, CO4 3SQ, UK – sequence: 7 givenname: Ming K. orcidid: 0000-0003-0809-9431 surname: Lim fullname: Lim, Ming K. email: Ming.Lim@glasgow.ac.uk organization: Adam Smith Business School, University of Glasgow, Glasgow, G12 8QQ, UK |
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Keywords | Hedging Environment Circular economy Cost-reduction technology innovation Remanufacturing |
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Title | How to balance economic profits and environmental protection: The impacts of cash hedging on remanufacturing firms |
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