Pollution prevention strategies of SMEs in a green supply chain finance under external government intervention.

Abstract

Small- and medium-sized enterprises (SMEs) are an important force in the promotion of economic development. However, SMEs in the supply chain are often severely punished by the government for polluting the environment through their production processes. Therefore, it is crucial to solve the environmental pollution problem of SMEs. To compensate for the "common knowledge" assumption of participants in traditional game theory, this study constructs an evolutionary game model of a green supply chain composed of SMEs, core enterprises, and commercial banks. The strategic decisions of the supply chain members are analyzed in relation to external interventions of the government. Subsequently, the impact of government incentives and penalties on these strategic choices is considered. The results show that government incentives can promote SMEs' choice to use pollution control strategies, and government penalties can reduce the risk of an SME defaulting, thus promoting the healthy development of a green supply chain finance system. Furthermore, increasing the new income of SMEs, raising the guarantee rate of core enterprises, and reducing the cost of green loans reviewed by banks and the guarantee cost of core enterprises can effectively promote the equilibrium of the tripartite evolutionary game. These findings indicate that the game model introduced here can effectively solve the environmental pollution problems of SMEs and promote the healthy development of a green supply chain finance system.