Sustainable supply chains with socially undesirable and intermediate outputs: evidence from Chinese agricultural cities

This paper uses a novel data envelopment analysis approach to assess the performance of supply chains in agriculture. Our network model treats the overall production and distribution process as consisting of separate stages. We account for the environmental externalities in agriculture and consider the links between different stages of the multi-stage process approximating agricultural supply chains. Additionally, we propose a new approach for modeling the impact of intermediate goods and calculate their marginal products. The empirical illustration is based on a panel of 18 cities in China’s Henan province during the period 2008–2021. Our results provide evidence of a significant potential for reducing carbon dioxide emission and increasing the agricultural output reaching final consumers in Henan. Notably, we find that overproduction of intermediate products can have an inhibitory effect on the final output, underscoring the importance of optimal resource allocation within the agricultural supply chain. We believe our findings can provide valuable insights for a more sustainable management of agricultural resources.