Abstract Driven by intensifying global concerns regarding climate change, cap-and-trade regulations have been widely implemented to catalyze low-carbon economic transitions. Through equity cooperation, supply chain entities can mitigate double marginalization effects and enhance sustainable development. This study evaluates the impact of complete centralization (SC), decentralization (DC), and three partial-centralization models, specifically downstream-shareholding (DS), upstream-shareholding (US), and cross-shareholding (CS), on a manufacturer’s carbon reduction and a retailer’s green advertising strategies. The key findings indicate that carbon reduction rates generally increase with carbon trading prices; however, when carbon prices and abatement costs become excessively high, further price increases can paradoxically inhibit reduction efforts. Furthermore, while heightened consumer sensitivity to low-carbon attributes stimulates green investment, disproportionately high equity stakes may suppress strategic intensity. Finally, strategic choices in coordination are significantly influenced by equity distribution. When both the retailer and manufacturer maintain substantial equity holdings, the US model maximizes aggregate supply chain profits; otherwise, the CS model is preferred. Notably, total profitability under the US model consistently exceeds that achieved under the DS model, providing robust managerial insights for corporate integration and carbon policy refinement.
Zhang et al. (2026) studied this question.