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Impact of Government Subsidy Strategies on Supply Chains Considering Carbon Emission Reduction and Marketing Efforts

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  • Shengjun Yuan

    (Business School, Guilin University of Electronic Technology, Guilin 541004, China)

  • Jie Li

    (Business School, Guilin University of Electronic Technology, Guilin 541004, China)

  • Xin Su

    (Department of Engineering Physics, Tsinghua University, Beijing 100084, China)

Abstract

This study analyzes the impact of different government subsidies on supply chain members under the low-carbon policy. Using the theory and the Stackelberg game method, we derive the equilibrium decision of diverse government subsidy models on the carbon emission reduction efforts and marketing efforts of supply chain members when manufacturers are dominant. We found that government subsidies positively influenced the carbon emission reduction efforts and marketing efforts of supply chain members and could increase the overall profit of the supply chain and the overall welfare of society. Meanwhile, social welfare increased first and then decreased with the subsidy, and there was a maximum value. Within a certain threshold, when the market demand was sensitive to carbon emission reduction efforts, it was more beneficial to subsidize manufacturers, and when it was sensitive to marketing efforts, subsidizing retailers was more beneficial. Regardless of the subsidy situation, an optimal subsidy rate exists among supply chain members. Meanwhile, adjusting government subsidy measures can decrease the profit gap between supply chain members, and it provides potential possibilities for cooperation among supply chain members.

Suggested Citation

  • Shengjun Yuan & Jie Li & Xin Su, 2022. "Impact of Government Subsidy Strategies on Supply Chains Considering Carbon Emission Reduction and Marketing Efforts," Sustainability, MDPI, vol. 14(5), pages 1-19, March.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:5:p:3111-:d:765969
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    References listed on IDEAS

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    1. Jian Li & Weihao Du & Fengmei Yang & Guowei Hua, 2014. "The Carbon Subsidy Analysis in Remanufacturing Closed-Loop Supply Chain," Sustainability, MDPI, vol. 6(6), pages 1-17, June.
    2. Toshimitsu, Tsuyoshi, 2010. "On the paradoxical case of a consumer-based environmental subsidy policy," Economic Modelling, Elsevier, vol. 27(1), pages 159-164, January.
    3. Sheu, Jiuh-Biing & Chen, Yenming J., 2012. "Impact of government financial intervention on competition among green supply chains," International Journal of Production Economics, Elsevier, vol. 138(1), pages 201-213.
    4. Resnier, Martin & Wang, Can & Du, Pengfei & Chen, Jining, 2007. "The promotion of sustainable development in China through the optimization of a tax/subsidy plan among HFC and power generation CDM projects," Energy Policy, Elsevier, vol. 35(9), pages 4529-4544, September.
    5. Zailani, Suhaiza & Jeyaraman, K. & Vengadasan, G. & Premkumar, R., 2012. "Sustainable supply chain management (SSCM) in Malaysia: A survey," International Journal of Production Economics, Elsevier, vol. 140(1), pages 330-340.
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    Cited by:

    1. Jinyu Wei & Xiuping Yi & Xin Yang & Yaoxi Liu, 2023. "Blockchain-Based Design of a Government Incentive Mechanism for Manufacturing Supply Chain Data Governance," Sustainability, MDPI, vol. 15(8), pages 1-21, April.

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