The Effect of Retailer’ Social Responsibility and Government Subsidy on the Performance of Low-Carbon Supply Chain

doi:10.1007/s40305-023-00479-z

Abstract

Abstract: Based on the cap-and-trade regulation, the effect of retailer’s social responsibility and subsidy are analyzed in a two-level low-carbon supply chain. The government subsidizes manufacturer to encourage low-carbon technological innovation. It is gotten that both retailer’s social responsibility and subsidy can improve the profit of manufacturer and reduce the carbon emission level. Although more subsidies to manufacturer indeed may decrease the profit of retailer, it is good measure to promote the centralized decision-making between the retailer and manufacturer. A certain retailer’s social responsibilities are good for the carbon emission reduction, but it also brings about the decline of profit in the supply chain. The centralized decision-making is always the best choice strategy for the carbon emission reduction, while in the decentralized decision-making situation, the retailer has more possibilities to care about social responsibility.

Key words: Social welfare, Subsidy, Cooperation, Carbon emission, Game

CLC Number:

91B06

Ping Wang, Xiao-Hui Yu, Qiang Zhang. The Effect of Retailer’ Social Responsibility and Government Subsidy on the Performance of Low-Carbon Supply Chain[J]. Journal of the Operations Research Society of China, 2025, 13(1): 227-267.

TrendMD

References

[1] Linton, J.D., Klassen, R., Jayaraman, V.: Sustainable supply chains: an introduction. J. Oper. Manag. 25(6), 1075-1082(2007)
[2] Amaeshi, K., Osuji, O.K., Nnodim, P.: Corporate social responsibility in supply chains of global brands: A boundaryless responsibility? Clarifications, exceptions and implications. J. Bus. Ethics 81(1), 223-234(2008)
[3] Xu, X., He, P., Xu, H., Zhang, Q.: Supply chain coordination with green technology under cap-andtrade regulation. Int. J. Prod. Econ. 183, 433-442(2017)
[4] Zhang, Y., Guo, C., Wang, L.: Supply chain strategy analysis of low carbon subsidy policies based on carbon trading. Sustainability 2(9), 3532(2020)
[5] Dong, C., Shen, B., Chow, P.S., Yang, L., Ng, C.T.: Sustainability investment under cap-and-trade regulation. Ann. Oper. Res. 240(2), 509-531(2016)
[6] Xie, X.P., Zhao, D.Z.: Research on cooperation strategy of enterprises’ carbon emission reduction in low carbon supply chain. J. Manag. Sci. 26(3), 108-119(2013)
[7] Brauneis, A., Mestel, R., Palan, S.: Inducing low-carbon investment in the electric power industry through a price floor for emissions trading. Energy Policy 53, 190-204(2013)
[8] Shoaeinaeini, M., Govindan, K., Rahmani, D.: Pricing policy in green supply chain design: the impact of consumer environmental awareness and green subsidies. Oper. Res. Int. J. 2021, 1-40(2021)
[9] Li, Z., Pan, Y., Yang, W., et al.: Effects of government subsidies on green technology investment and green marketing coordination of supply chain under the cap-and-trade mechanism. Energy Econ. 101, 105426(2021)
[10] Li, Y., Zhao, D.: Research on R&D cost allocation comparison for low-carbon supply chain based on government’s subsidies. Soft Comput. 28, 21-26+31(2014)
[11] Xie, X.M., Zhu, Q.W., Wang, R.Y.: Turning green subsidies into sustainability: how green process innovation improves firms’ green image. Bus. Strateg. Environ. 28, 1416-1433(2019)
[12] Chen, W.T., Hu, Z.H.: Using evolutionary game theory to study governments and manufacturers’ behavioral strategies under various carbon taxes and subsidies. J. Clean. Prod. 201, 123-141(2018)
[13] Cao, K.Y., Xu, X., Wu, Q., Zhang, Q.: Optimal production and carbon emission reduction level under cap-and-trade and low carbon subsidy policies. J. Clean. Prod. 167, 505-513(2017)
[14] Hou, Q., Sun, J.Y.: Investment strategy analysis of emission-reduction technology under cost subsidy policy in the carbon trading market. Kybernetes 49, 252-284(2019)
[15] Hussain, J., Pan, Y., Ali, G., Yue, X.: Pricing behavior of monopoly market with the implementation of green technology decision under emission reduction subsidy policy. Sci. Total Environ. 709, 136110(2020)
[16] Hutchinson, E., Kennedy, P.W., Martinez, C.: Subsidies for the production of cleaner energy: when do they cause emissions to rise? J. Econ. Anal. Policy 10(1), 1-9(2010)
[17] Chen, J.Y., Dimitrov, S., Pun, H.: The impact of government subsidy on supply Chains’ sustainability innovation. Omega Int. J. Manag. Sci. 86, 42-58(2019)
[18] Choi, T.M., Cai, Y.J., Shen, B.: Sustainable fashion supply chain management: a system of systems analysis. IEEE Trans. Eng. Manage. 66(4), 730-745(2019)
[19] Shen, B., Zhu, C., Li, Q., Wang, X.: Green technology adoption in textiles and apparel supply chains with environmental taxes. Int. J. Prod. Res. 59(14), 4157-4174(2020)
[20] Cao, Y., Shen, B.: Adopting Blockchain Technology to Block Less Sustainable Products’ Entry in Global Trade. Transp. Res. Part E Logist. Transp. Rev. 161, 102695(2022)
[21] Ebrahimi,S.,Hosseini-Motlagh,S.M.,Nematollahi,M.,Cárdenas-Barrón,L.E.:Coordinatingdoublelevel sustainability effort in a sustainable supply chain under cap-and-trade regulation. Expert Syst. Appl. 207, 117872(2022)
[22] Ni, D., Li, K.W., Tang, X.: Social responsibility allocation in two-echelon supply chains: insights from wholesale price contracts. Eur. J. Oper. Res. 207(3), 1269-1279(2010)
[23] Nematollahi, M., Hosseini-Motlagh, S.M., Heydari, J.: Coordination of social responsibility and order quantity in a two-echelon supply chain: a collaborative decision-making perspective. Int. J. Prod. Econ. 184, 107-121(2017)
[24] Ni, D., Li, K.W.: A game-theoretic analysis of social responsibility conduct in two-echelon supply chains. Int. J. Prod. Econ. 138(2), 303-313(2012)
[25] Goering, G.E.: Corporate social responsibility and marketing channel coordination. Res. Econ. 66(2), 142-148(2012)
[26] Panda, S.: Coordination of a socially responsible supply chain using revenue sharing contract. Transp. Res. Part E Logist. Transp. Rev. 67, 92-104(2014)
[27] Hsueh, C.F.: Improving corporate social responsibility in a supply chain through anew revenue sharing contract. Int. J. Prod. Econ. 151, 214-222(2014)
[28] Panda, S., Modak, N., Basu, M., Goyal, S.: Channel coordination and profit distribution in a social responsible three-layer supply chain. Int. J. Prod. Econ. 168, 224-233(2015)
[29] Zhou, Y., Hu, F., Zhou, Z.: Pricing decisions and social welfare in a supply chain with multiple competing retailers and carbon tax policy. J. Clean. Prod. 190, 752-777(2018)
[30] Shen, B., Gao, Y., Xu, X., Wang, X.: Product line design and quality differentiation for green and non-green products in a supply chain. Int. J. Prod. Res. 58(1), 148-164(2019)
[31] Shen, B., Liu, S., Zhang, T., Choi, T.M.: Optimal advertising and pricing for new green products in the circular economy. J. Clean. Prod. 233, 314-327(2019)
[32] Shen, B., Choi, T.M., Chan, H.L.: Selling green first or not? A Bayesian analysis with service levels and environmental impact considerations in the big data era. Technol. Forecast. Soc. Chang. 144, 412-420(2019)
[33] Qb, A., Mc, B., Yn, C., et al.: Improving sustainability and social responsibility of a two-tier supply chain investing in emission reduction technology. Appl. Math. Model. 95, 688-714(2021)
[34] Geffen, C.A., Rothenberg, S.: Suppliers and environmental innovation the automotive paint process. Int. J. Oper. Prod. Manag. 20(2), 166-186(2000)
[35] Klassen, R.D., Vachon, S.: Collaboration and evaluation in the supply chain: the impact on plant-level environmental investment. Prod. Oper. Manag. 12(3), 336-352(2003)
[36] Vachon, S., Klassen, R.D.: Environmental management and manufacturing performance: the role of collaboration in the supply chain. Int. J. Prod. Econ. 111(2), 299-315(2008)
[37] Zhu, Q., Geng, Y., Lai, K.H.: Circular economy practices among Chinese manufacturers varying in environmental-oriented supply chain cooperation and the performance implications. J. Environ. Manage. 91(6), 1324-1331(2010)
[38] Luo, Z., Chen, X., Wang, X.: The role of co-opetition in low carbon manufacturing. Eur. J. Oper. Res. 253(2), 392-403(2016)
[39] Shen, B., Ding, X., Chen, L., Chan, H.L.: Low carbon supply chain with energy consumption constraints: case studies from china’s textile industry and simple analytical model. Supply Chain Manag. Int. J. 22(3), 258-269(2017)
[40] Meng, W.: Comparation of subsidy and cooperation policy based on emission reduction R&D. Syst. Eng. 28, 123-126(2010)
[41] Song, Y., Zhao, D.Z.: The product portfolio optimization of manufacturers based on low-carbon economy. Syst. Eng. 30, 75-81(2012)
[42] Mondal, C., Giri, B.C., Biswas, S.: Integrating corporate social responsibility in a closed-loop supply chain under government subsidy and used products collection strategies. Flex. Serv. Manuf. J. 8, 1-36(2021)
[43] Sinayi, M., Rasti-Barzoki, M.: A game theoretic approach for pricing, greening, and social welfare policies in a supply chain with government intervention. J. Clean. Prod. 196, 1443-1458(2018)
[44] Wen, X., Sun, X., Sun, Y., Yue, X.: Airline crew scheduling: models and algorithms. Transp. Res. Part E Logist. Transp. Review 149, 102304(2021)