Evaluation of Internal Costs and Benefits for Taiwanese Computer Manufacturers Adopting Green Supply Chains

This study aims^pto explore internal cost variation in Taiwan's computer industry after adopting green supply chains, and to calculate sales revenue difference with and without green supply chains, further estimating the so-called “green producer's surplus.” that is the difference between the changes of revenue and product cost after adopting green supply chains. The multiple-output translog cost function is used to establish an empirical model based on the cost data of twelve listed companies in Taiwan. There are two kinds of outputs and four element prices considered in the empirical cost model. This study uses 2006, the year the associated environment directives were executed as the first year Taiwanese computer manufactures adopted green supply chains. The results of estimation show that, the internal cost of Taiwan's computer industry increased 3.84% after adopting green supply chains in the European market, and the entire Taiwanese computer industry generated approximately NT$1.72 billion of producer's surplus in 2006. Our major research contribution is to develop a valid cost function and the cost-benefit difference analysis to measure the associated changes in cost and revenue for the Taiwanese computer manufacture adopting green supply chains, and to prove the significant internal economic benefit gained by Taiwanese computer industry after implementing green supply chains.