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Lookup NU author(s): Professor Jingxin DongORCiD
This work is licensed under a Creative Commons Attribution 4.0 International License (CC BY 4.0).
This paper develops a game theory model of digital technology innovation (DTI) within a two-tier supply chain involving manufacturers and logistics providers, with a shared goal of carbon emission reduction. The model examines how manufacturers and logistics providers can adopt integrated innovation to enhance both carbon reduction and DTI performance while maximizing mutual benefits. The analysis yields three key findings: First, DTI does not always lead to carbon reduction within the supply chain through the integration of manufacturers and logistics providers. Instead, optimal integration strategies and responsibility allocation models should be contingent on the capabilities of manufacturers and logistics providers. Second, when logistics providers have significantly superior capabilities, they should assume full responsibility for both carbon reduction and DTI services. Conversely, when manufacturers have significantly superior capabilities, they should lead carbon reduction efforts while the logistics provider focuses on DTI. Sensitivity analyses demonstrate the robustness of the results with respect to different profit coefficients and cost-sharing ratios. Third, we extend the model to consider the carbon trading mechanism and external DTI effects on market demand and show that the findings are robust when these additional mechanisms and levers are introduced. Managerial relevance statement - First, the paper offers managerial guidance by introducing three Integrated Innovation between Logistics Provider and Manufacturer (II-LM) models that are adaptable to diverse industrial scenarios. Engineering managers should tailor their DTI strategies to the specific conditions of their enterprises. By adopting the II-LM strategies, they can enhance collaboration and achieve both carbon reduction and DTI engineering objectives. Second, the “double benefit” effect of carbon trading can encourage policymakers to accelerate the development of carbon trading policies and market mechanisms. Finally, for United Nation's 17 Sustainable Development Goals (SDGs), this paper contributes to SDG 9, SDG 12, and SDG 13.
Author(s): Liu W, Wang S, Chen XA, Dong J
Publication type: Article
Publication status: Published
Journal: IEEE Transactions on Engineering Management
Year: 2025
Pages: Epub ahead of print
Online publication date: 26/12/2025
Acceptance date: 19/12/2025
Date deposited: 25/12/2025
ISSN (print): 0018-9391
ISSN (electronic): 1558-0040
Publisher: IEEE
URL: https://doi.org/10.1109/TEM.2025.3648753
DOI: 10.1109/TEM.2025.3648753
ePrints DOI: 10.57711/4bsa-9g03
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