Growth Equilibrium Analysis of Enterprise Ecological Benefits based on Eco-industrial Chain

Bing-chun LIU!, 2, Zhen-zhen HAO 1

I School of Management, Tianjin University, Tianjin, China 2 School of Mnagement, Tianjin University of Technology, Tianjin, China

(zhen_tianjin@126.com)

Abstract -Eco-industrial chain is en effective way to

realize the coordinated development of economy and environment. It can maximize resources and energy use efficiency and minimize waste discharge by material and energy recycling in the chain, so as to achieve economy developments and environment protection. The internal relations of the coexisting eco-industrial chain are discussed in this paper first, meanwhile, the effectiveness growth model of eco-industrial chain is proposed to analysis ecological benefits development trends. The objective of this paper is to determine the ecological industry chain ideal operational mode for companies by analyze the equilibrium state of eco-industrial chain.

Keywords -Eco-Industrial Chain, Ecological Benefit ,

Equilibrium

I. INTRODUCTION

Recently, with the eco-industry chain being recognized as a specific ecological system, many scholars believe that the equilibrium of eco-industry chain depends on its diversity. The diversity of industry chain mainly refers to the structure and functional diversity in its organization, size, products, markets, technologies, policies and distribution etc., the diversity of eco-industry park's type, the diversity of internal enterprise, the diversity of internal enterprise's input and output, the diversity of the park's management policies, and the diversity in production, management, material flow, energy flow, information flow, resources, products, process of the waste recycling.

Eco-industry chain equilibrium analysis is to show the integrated features in the condition of system dynamic balance by the optimization of eco-industrial chain composition, the diversification of system's function and the stability of the above two[11. The common analysis include three angle: the excellent degree of system ontology, the dynamic flow within the system (including logistics, energy flow, capital flow and information flow, etc.), and the self-regulation to the influence factors out of the system.

II. THE CONSTRUCTION OF COEEXISTING ECO-INDUSTRIAL CHAIN

The main relationship between enterprises in eco-industry chain is industry symbiosis, meanwhile competition for avoiding some possible risks, thus, the

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enterprises formed different operation mode [21. There are many characteristics of eco-industry chain:

I ) Enterprises forming a close working relationship through material substitution.

2) The relationship between enterprises is equal, mutual benefit, but not mutual dependency.

3) All enterprises are in an equal position, and achieve the value chain value-added relying on market adjustment mechanism.

4) When co-operation is no longer benefit, the enterprises terminate partnership and re-explore new cooperation opportunities.

5) The eco-industrial chain is a relatively loose one. Generally, mutualism symbiotic relationship exists in

SMEs (Small and Middle Enterprises) and industry parks, especially high-tech Park, such as America's Silicon Valley Industry Park, Canadian's Burnside Industrial Park and Beijing Zhongguancun Science Park. Burnside Industrial Park is the world's most successful, biggest, mutualism, symbiotic, and typical park. It located in the east of Canada, and includes about 1300 dozens of enterprises in 10 industries, such as paper-making, construction, petroleum refining and chemical industry. The park are covered from the, after nearly 10 years' development, the park has relatively abundant by-product exchange. A variety of industry or different enterprises in the same industry construct material links and energy links, then form a mutually beneficial symbiosis and eco-industrial chain.

III. GROWTH EQUILIBRIUM ANALYSIS OF ECO-INDUSTRIAL CHAIN

A. Enterprise Ecological Benefits Growth Model

Logistic growth model is often used to describe the variation of population growth, and through the index and various forms of Logistic growth equation to describe the interaction among the various populations. Ecology industry emphasizes the industrial system can imitate symbiotic relationship between the biological populations in natural ecological system, optimize the resources with in the system, order the materials, energy and information flow, so as to form an industrial ecosystem which is as efficient as natural ecosystems, therefore it's appropriate to choose Logistic model to describe various relationships within industry system. This paper firstly studies the enterprises eco-efficiency growth state in eco-industry chain by Logistic model, and then analyze the enterprises

symbiotic equilibrium state in eco-industry chain to find the ideal operation mode and the conditions meeting it.

The model we build in this paper shows eco-industrial chain's evolution through the changing of eco-efficiency. Ecological efficiency refers to the ratio of the value of products or services and environmental impact (i.e., raw materials, energy use and waste discharge), and its main contents Includes raw materials and energy's consumption intensity reduction, pollution reduction and other five elements. Ecological efficiency can objectively show the win-win state of corporate economic and environment [61.

To illustrate the problem simply, this paper assumes that there are only two companies, company A and company B, and the interpretation of related variables as follows,

E A and E B mean company A and company B' s

eco-efficiency respectively; M A and M B respectively

shows the maximum eco-efficiency of company A and company B in the independent state ,and when E = M , the company's eco-efficiency stops growing, meanwhile, here we assume that the corporaters' eco-efficiency

independent growth should obey Logistic rules; r A and

rB respectively shows the average eco-efficiency

growth rate in the same industry of company A and companyB .

From the above, we can be learned above

that eA/mA andeB/mB denote company A and company

B's eco-efficiency account for the largest possible proportion respectively, and

accordingly 1-eA/mA and 1-eB/mB means the

remaining unused space to the maximum possibility. With the gradual increase of eco-efficiency, and the decrease of remaining unused space to the maximum possibility, a variety of retardation which obstruct the growth of eco-efficiency will be increased.

Here, let A A denote company B ' s Eco-efficiency

units consume resources used to support company A (material, energy, markets, etc.) divided by company A's Eco-efficiency units consume resources, correspondingly,

let AB denote company B's Eco-efficiency units consume

resources used to support company A (material, energy, markets, etc.) divided by company A's Eco-efficiency units consume resources. It can also be said that AA means company B's natural growth saturation on the contribution of company A's ecological benefits,

correspondingly, AB means company B' s natural

growth saturation on the contribution of computer A's ecological benefits.

Therefore, the Logistic model is used to describe the biological enterprise independent and non-binding conditions (ie ideal conditions) the growth of eco-efficiency law is:

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de -=re dt (1 )

In fact, both the general market environment and the Industrial chain enterprises' environment, companies can not be survived in unconditional environment, but in Various objective reality. The improvement of enterprises' eco-efficiency is always very limited. enterprises' eco-efficiency growth law in enterprises real environment can be describe as equation (2), using Logistic model in the Biology .

de e -= re(I--) (2) dt rn From the above, in independent state, we can build

company A and company B' eco-efficiency growth law model, showed in equation (3).

deA _ (1 eA) ---rAeA --dt rnA deB _ (1 eB) -- - rBeB -- (3) dt mB

B. th e coexisting eco-industrial ch ain Symbiotic growth equilibrium

In the coexisting eco-industrial chain , company A and company B reach a close corporate working relationship through the recycling of material, energy and information, mutual promotion and mutual benefit, and enhance each of the eco-efficiency. However, the survival is not be dependent on the other sides.

1) Only two companies In the circumstance that company A and company B

is separated, the growth of eco-efficient obey the law of logistic growth equation.

When company A and company B to achieve coexistence, both sides through mutual use of the other's by-products or surplus materials to reduce industrial pollution, save money and improve their eco-efficient. Model building as showed in equation (4).

deA _ (1 eA � eB ) ---rAeA - - +AA -dt rnA mB

deB eB eA - = rBeB(1--+ AB -) (3)

dt mB mA

2) multi-companies Let A A denote all the other enterprises'

eco-efficiency units consume resources used to support enterprise A (material, energy, markets, etc.) divided by company A's Eco-efficiency units consume resources. Let AB denote all the other enterprises' Eco-efficiency units consume resources used to support enterprise A (material, energy, markets, etc.) divided by company A's Eco-efficiency units consume resources. Correspondingly,

let Ap denote all the other enterprises' Eco-efficiency

units consume resources used to support enterprise P (material, energy, markets, etc.) divided by company P's

Eco-efficiency units consume resources. Model building as follows:

deN [ eN 1 l eA eB ep eN_I J] (5) -=rNeN 1--+A.N -+-+ ... +-+ ... +--dt mN mA mB mp mN_1

(3) Equilibrium analysis Since multi-enterprise model is more complex, here

this paper only discusses the situation with two companies. Solutions to the following algebraic equations,

If (e A , e B ) == rAe A (1 -� + A A �) mA mB

g(eA,eB) == rBeB(1-�+ AB�) mB mA

We have two equilibriums Eland E2:

E (MA(I+ AA) MB(1+ AB)

) 1 E2(0,0) 1-AAAB

' 1-AAAB

(6)

Do equation (4) with Taylor series expansion, the coefficient matrix is A.

A= r rA(I_

2eA+ AA..2....) rAAA

2 1 mA MB mB (7)

rBAB!.L rB(I-2eB + AB

�) mA mB MA

According to differential stability conditions, we have

that P2 is unstable equilibrium point, and the conditions

for Point Fi to be a stable one are A A < 1, AB < 1 .we

can easily analyzed that if company A and company B want to maintain a steady cooperation, their contribution to the economic benefits improvement should not be too large, also, we have that industrial symbiosis for improving eco-efficiency enterprise is limited. In equilibrium, the two companies' eco-benefit can be expressed as follows,

MA(1+ AA) l-AAAB

Both of their eco-benefit are greater than when they operating independently. This symbiotic relationship is a good symbiotic model. The dependencies of both companies is weak, and in line with the principle of mutually beneficial and common development. Meanwhile, the weak link may lead to loyalty and credit risk between enterprises because each company can have many different choices, which lead to the diversity of the industrial chain and the formation of competition between enterprises in eco-industrial chain, then intensify the instability factors in the symbiotic system easily.

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IV. CASE STUDY

This paper takes one Economic and Technological Development Zone as an example. The Economic and Technological Development Zone focuses on Electronic Information Industry, Bio-pharmaceutical industry, Automotive manufacturing Industry, and Food and Beverage Industry four pillar industries, and selective investment according to the demand of economic development and market mechanisms. The zone take the eco-Industrial chain, the product chain and the waste Chain as the main line to build a Circular Economy Development Zone, and the eco-industrial chain as shown in figure I.

; p�aft�!

-r ------------- , I I �l

:0 � � � � � � l � � :i .:

1 I I I I 1 1

-1-------______ 1 I

[ SOlclwJI)ltft.t-j

Fig. 1. Ecological Industry Chain Diagram

This paper selects Electronic Information Industry, Bio-pharmaceutical industry, Automotive manufacturing Industry, and Food and Beverage Industry four types of enterprises for the study and marked A,B,C,D respectively, then do Regression Analysis to measured enterprises' eco-benefits using SPSS statistical software. After that, we will have eco-efficiency functions, maximum ecological benefit and the average eco-benefit growth rate.

Company A: y = 236 .l eo.o209 x, M A = 455 ,

rA = 0.0689

Company B: y = 255 .64eo.0134x, M B = 393 ,

rB = 0.0622

Company C: y=250.1 4eo.0181x, M e =439 ,

rc = 0.0681

Company D: y = 174 .66 eo.0135 x, M D = 290 ,

rD = 0.0535

Then substitute the results into the following models:

deA =rAeA[I-�+ AA(�+ �+ eD )]

dt mA mB me mD

dec =re ee [I-�+ Ac(2+ �+ eD )]

dt me mA mB mD

deD =rD eD[I- eD + AD(2+ �+ �)] (8)

dt mD mA mB me

Then solving the model by SPSS, we have

AA =0.0689 , AB = 0.0622 , k=o.068 , AD =0.0535.

Be seen from the results above, AA' AB, Ae ,

AD are all less than I, which explains that the premise

for cooperation in four major industrial chain maintained a steady state is that any of the four major industries do not much eco-benefit improvement to the other three industry, and interdependence was not very obvious

among the four major industries. Meanwhile, AA' AB,

Ae , AD are all more than 0, which explains that In the

equilibrium steady state, the four major industries of their respective eco-efficiency is greater than the economic benefits when independent operating.

V. CONCLUSION

Eco-industrial chain is the main form of ecological

industry practice, also is a new organization form imitate

material and energy cycles of nature ecological processes

to plan industrial ecology system, eco-industrial chain can

fully exert effects of the market allocation of resources,

and integrate each enterprise's superior resources to

maximize environmental and economic benefits. This

article analyzes the internal relationship of the symbiotic

ecological industry chain, analyzes the development of

ecological industry and helping establish the ideal state of

ecological industry chain operating mode by setting up an

enterprise eco-benefit logistics growth model.

REFERENCES

[1] Jiang Guojun, Jiang Mingxin, "Study on Industrial Chain and Its Stability" in Journal of Chongqing Universit, vol. 10, no. 1, pp. 36-38, Oct. 2004.

[2] Cai Xiaojun, Li Shuangjie, Liu Qihao. "Study on formation mechanism of Eco-Industrial Park symbiotic chain and its Stability" in Soft Science, vol. 20, no. 3, pp. 312-14, Mar. 2004.

[3] Marcus G.Van Leeuwen, Walter J. V. Vermeulen.

"Planning Eco-Industrial Parks: an Analysis of Dutch

Planning Methods" in Business Strategy and the Environment. vol. 12, pp. 147-162, Dec. 2003.

[4] Wang Hong, Zhang Wei, Zhu Yuancheng. "Analysis of Building Ecological Industry Chain in the Constrain of Resource" in Scientific Management Research. vol. 24, pp. 29-32, Jan. 2006.

[5] Zhang Chengkao. "Research on Eco-industrial Park System Model Based on Ecological Theory" in Industrial Technology & Economy. vol. 25, pp. 84-87, Mar. 2006.

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