
Impact of government subsidies on green supply chain operation under different power structures
Author(s) -
Liu Liu,
Zhang Hua
Publication year - 2021
Publication title -
journal of physics. conference series
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.21
H-Index - 85
eISSN - 1742-6596
pISSN - 1742-6588
DOI - 10.1088/1742-6596/1941/1/012007
Subject(s) - subsidy , stackelberg competition , supply chain , business , government (linguistics) , industrial organization , microeconomics , economics , marketing , market economy , linguistics , philosophy
Government subsidies play an important role in the operations of a green supply chain. However, the effectiveness of these subsidies under different power structures has rarely been examined. In this paper, we investigate a two-echelon green supply chain with a manufacturer who obtains government subsidies to develop and produce green products and a retailer who sells to consumers. We examine the impact of government subsidies on green product innovation, supply chain profits, and social welfare by focusing on five power structure models: centralized decision (C), manufacturer-Stackelberg (MS), retailer-Stackelberg (RS), vertical Nash (NL), and vertical Nash with bargaining mechanism (NB) models. The results show that government subsidies have a positive impact on the energy-saving level of green products, firms’ financial performance, and supply chain profits. We also find that the NB model is the optimal power structure of decentralized decision scenarios in terms of green product innovation, supply chain profits, and social welfare. Our findings indicate that if supply chain members have equal power and bargaining mechanisms the effectiveness of government subsidies will be enhanced. This study provides new theoretical insights for green supply chain research by revealing the interplay between the power structure of the green supply chain and government subsidies.