How to balance economic profits and environmental protection: The impacts of cash hedging on remanufacturing firms
研究了现金对冲策略如何通过影响成本降低技术投资，进而影响再制造企业的利润和环境，发现现金对冲的效果因条件而异，某些条件下可同时提升利润和保护环境。
The popularity of the circular economy attracts more attention to balance environmental and economic impacts. Many supply chain remanufacturing firms have started to use the cash flow to invest in cost-reduction technologies to increase profits. However, the uncertainty of cash flow significantly affects the technology investment effectiveness, and therefore, some firms attempt to adopt cash hedging strategies to mitigate the uncertainty. This study investigates the impacts of cash hedging on remanufacturing firms' profits and the environment through the lenses of cost-reduction technologies investments. The proposed nonlinear programming models were drawn on cash hedging and risk management theory. Empirical regression analysis was conducted using longitudinal datasets of listed Chinese remanufacturing firms for ten years ranging from 2010 to 2019. Different from the traditional wisdom which argues that cash hedging has a single effect (i.e., positive, negative, or no impact) on corporate economic performance, this paper's results indicate that the impact of cash hedging on corporate profits varies in different conditions; Further, this study is one of the first to identify some interesting conditions, in which cash hedging can bring along remanufacturing firms with profits while protect environment. This study provides insightful suggestions for the manufacturer's and government's policy design.