Impacts of information sharing on a green supply chain with bank credit financing

This paper investigates the impacts of information sharing on a green supply chain in which a capital-constrained manufacturer is endowed with private demand information. In different information sharing scenarios (no information sharing, partially sharing information with either the supplier or the bank, and public information sharing), the manufacturer invests in carbon emission reduction and determines the optimal output after gaining a loan from a bank by pledging carbon emission permits. Interestingly, we find that publicly sharing positive demand signals can either enhance or decrease the output and emission abatement level. Additionally, we find that the pledge rate becomes deterministic when sharing positive information. In contrast, it is variable and no larger than in the no-information-sharing scenario when sharing negative information. There is a case in which public information sharing benefits the manufacturer and supplier, regardless of sharing positive or negative information. Contrary to our intuition, we find that while the bank suffers from publicly sharing positive information, it can benefit from sharing negative information. Moreover, this study provides the specific conditions under which a manufacturer chooses a particular type of information sharing format.