Financing Decisions in a Green Closed-Loop Supply Chain under Demand Uncertainty and Government Consumer Subsidies
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Abstract
Amid growing environmental pressures and resource constraints, green closed-loop supply chains (GCLSCs) play a vital role in achieving sustainable economic development. This study examines a GCLSC composed of one manufacturer and one retailer under uncertain market demand and government consumer subsidies. Using a Stackelberg game framework, we analyze the manufacturer’s production and financing decisions across three scenarios: no capital constraint, advance-payment financing, and equity financing. The results show that demand uncertainty, consumer price sensitivity, and green preference significantly affect optimal decisions. Under advance-payment financing, manufacturers raise wholesale prices but reduce product greenness and recycling levels, lowering their own profit while improving retailer gains. In contrast, equity financing aligns with the unconstrained benchmark, preserving environmental performance and overall efficiency. Numerical analyses confirm the theoretical findings. The study provides managerial insights for promoting green financing, enhancing consumer awareness, and fostering innovation in sustainable supply chains.
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