Bank vs. Trade Credit Financing for Emission Reduction: The Role of Retailer Information Disclosure

This study constructs a Stackelberg game model for a supply chain comprising a capital-constrained manufacturer and a retailer with private demand information to analyze the interplay between the manufacturer’s carbon abatement financing strategy (bank credit vs. trade credit) and the retailer’s information sharing decision. The results show that the impact of information sharing is contingent on market sentiment. Sharing is beneficial, promoting abatement investment and supply chain performance under optimistic market forecasts, but it can suppress investment and increase emissions under pessimistic ones. Furthermore, the manufacturer’s financing choice is driven by the investment cost and carbon price; trade credit becomes more attractive for emission reduction as investment costs decrease and carbon prices rise. Counter-intuitively, higher forecast accuracy does not always incentivize information sharing, with its effects on disclosure and environmental performance exhibiting distinct threshold characteristics.