Green technology investment in competitive supply Chains: Exploring technology spillovers and altruistic preferences under carbon tax policy

Green technology plays a vital role in reducing carbon emissions, helping firms lower their carbon-related costs while enhancing market competitiveness. However, technology spillovers and manufacturers’ altruistic preferences towards downstream retailers significantly impact green technology investment decisions. This paper explores these decisions within competitive supply chains under carbon tax policy, focusing on the interactions between horizontally competing manufacturers and their altruistic behavior toward retailers. This study models several scenarios: no investment, unilateral investment, and bilateral investment. It is revealed that strong technology spillovers can discourage manufacturers from pursuing green technology investments due to the potential to benefit from competitors’ advancements. In contrast, weaker spillovers encourage greater investment. Furthermore, higher altruistic preferences among manufacturers lead to increased green technology investments, boosting retailer profits. However, manufacturers with limited absorptive capacity may face disadvantages in a bilateral investment setting. These findings offer insights into how the interplay of technology spillovers and altruistic preferences shapes green technology investment strategies, hence contributing to more effective policy and strategic decision-making in competitive supply chains. • Carbon tax policy and technology spillovers shape firm green investment strategy. • Altruistic preferences drive higher green technology investment for firms. • Strong technology spillovers may reduce firms’ incentive to invest. • Limited absorptive capacity makes firms face disadvantage in bilateral investment.