An economic analysis of the supply chain and empirical study of the interactive mechanism of urbanisation, industrialisation and environment

Abstract

With the rapid development of technology and globalization in recent years, the cost of communication among companies is reducing, which has significantly encouraged collaboration among the involved companies. Keeping a good collaborative relationship can benefit all of the companies within the supply chain. In this context, studies of the coordination/collaboration within supply chain have gained increasing prominence, and are considered to have an important role to play in improving the performance of the whole supply chain in practice.

In this thesis, I first modelled the supply chain with the consideration of the retailer’s initial wealth constraint problem. To solve this problem, a bank is introduced into the mostly popular model, simple wholesale price model. The resulting supply chain model has following three parties: (1) a bank; (2) a retailer with limited initial wealth; (3) a manufacture. In the proposed model, we present a new bank financing, i.e. the risk-free interest loan program; help the retailer’s initial wealth constraint problem. In the risk-free interest loan program, the interest is paid by both the retailer and the manufacturer, which is as follows: the retailer pays a risk-free rate part, and manufacturer pay the left part. Then the collaborations of this three-party supply chain are analysed in Chapter 2 and Chapter 3 respectively under different assumptions:

In Chapter 2, we study the three-party with the pre-determined retail price, the retail price is exogenous and fixed. The result show that the loan program can improve both the retailer’s and the manufacturer’s profits. We further compare the risk-free loan program with interest-free loan program, the results indicate that (i) both of the retailer’s and the manufacturer’s profit with the risk-free loan program are greater than the one with interest-free loan program when the retailer’s initial wealth is smaller. (ii) both of the retailer’s and the manufacturer’s profit with the risk-free loan program are same as the ones with interest-free loan program when the retailer’s initial wealth is medium and greater, but the risk-free interest program is advantage and it can avoid the retailer’s moral hazard, i.e. the risk-free interest program can avoid the retailer borrow excessive money.

Chapter 3 further expanded this three-party model a two-period games, based on the risk-free interest loan in the first period. The financial organization only occurs in the first period and if the player bankrupts, there will not be any further game in the second period. We found that with the bank in the first period, the retailer will order more products and want to take the risk because the bank will share some risk with him. Both retailer and manufacturer are better off in the first period. However, in the second period, when the bank leaves the game, the retailer will order much less than which in the first period even its wealth grows. Compared with the case without the bank, both manufacturer and retailer are better off in the second period.

Chapter 4 is a case study which focuses on a province in China. This chapter mainly discuss about the relationship among urbanization, industrialization and environment. Many studies show that the relationship is complex, however, still follows some principles. On the other hand, Gollin (2013) shows that resource exporters that have urbanized without increasing output in either manufacturing or industrial services such as finance. Xinjiang, the province we focus on, also play a role of resource exporter in China. However, no research considers this special province in China. By establishing the index system, we find out Xinjiang follows environmental Kuznets Curve and the development of heavy industry provide a large driving force to the urbanization process. We then find out that the mainstay industries based on the advantages of resources in Xinjiang, such as oil, natural gas, coal, electricity. This type of industries’ pollution is heavy, but this is the actual situation of Xinjiang's industrial development.

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