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Impact of government financial intervention on competition among green supply chains

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  • Sheu, Jiuh-Biing
  • Chen, Yenming J.

Abstract

This work analyzes the effects of governmental financial intervention on green supply chain competition using a three-stage game-theoretic model. Nash equilibrium solutions for governmental and chain member decisions are derived. Analytical results suggest that the government should adopt green taxation and subsidization to ensure that green profit attributed to green-product production is non-negative. Strategically, low-wholesale-price strategies are suggested to recycled-component suppliers under green subsidization to stimulate manufacturers' intention of green product production under green taxation. Numerical results reveal that under equilibrium conditions, social welfare and chain-based profits improve by 27.8% and 306.6%, respectively, compared with the case without financial intervention.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:proeco:v:138:y:2012:i:1:p:201-213
    DOI: 10.1016/j.ijpe.2012.03.024
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    Cited by:

    1. Hafezalkotob, Ashkan, 2017. "Competition, cooperation, and coopetition of green supply chains under regulations on energy saving levels," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 97(C), pages 228-250.
    2. repec:eee:apmaco:v:292:y:2017:i:c:p:294-308 is not listed on IDEAS
    3. Luo, Jun & Chong, Alain Yee-Loong & Ngai, Eric W.T. & Liu, Martin J., 2014. "Green Supply Chain Collaboration implementation in China: The mediating role of guanxi," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 71(C), pages 98-110.
    4. Lu, Zhijian & Shao, Shuai, 2016. "Impacts of government subsidies on pricing and performance level choice in Energy Performance Contracting: A two-step optimal decision model," Applied Energy, Elsevier, vol. 184(C), pages 1176-1183.
    5. repec:eee:transe:v:103:y:2017:i:c:p:248-260 is not listed on IDEAS
    6. Sheu, Jiuh-Biing & Chen, Yenming J., 2014. "Transportation and economies of scale in recycling low-value materials," Transportation Research Part B: Methodological, Elsevier, vol. 65(C), pages 65-76.
    7. Luo, Jun & Chong, Alain Yee-Loong & Ngai, Eric W.T. & Liu, Martin J., 2015. "Reprint of “Green Supply Chain Collaboration implementation in China: The mediating role of guanxi”," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 74(C), pages 37-49.
    8. Sabbaghi, Mostafa & Behdad, Sara & Zhuang, Jun, 2016. "Managing consumer behavior toward on-time return of the waste electrical and electronic equipment: A game theoretic approach," International Journal of Production Economics, Elsevier, vol. 182(C), pages 545-563.
    9. Yu, Yugang & Han, Xiaoya & Hu, Guiping, 2016. "Optimal production for manufacturers considering consumer environmental awareness and green subsidies," International Journal of Production Economics, Elsevier, vol. 182(C), pages 397-408.
    10. Dongxue Guo & Yi He & Yuanyuan Wu & Qingyun Xu, 2016. "Analysis of Supply Chain under Different Subsidy Policies of the Government," Sustainability, MDPI, Open Access Journal, vol. 8(12), pages 1-18, December.
    11. Jiuh-Biing Sheu, 2014. "Green Supply Chain Collaboration for Fashionable Consumer Electronics Products under Third-Party Power Intervention—A Resource Dependence Perspective," Sustainability, MDPI, Open Access Journal, vol. 6(5), pages 1-44, May.
    12. Chen, Jen-Ming & Chang, Chia-I, 2013. "Dynamic pricing for new and remanufactured products in a closed-loop supply chain," International Journal of Production Economics, Elsevier, vol. 146(1), pages 153-160.
    13. Li, Ling & Wang, Bin & Cook, David P., 2015. "Reprint of “Enhancing green supply chain initiatives via empty container reuse”," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 74(C), pages 109-123.
    14. Zhou, Wenhui & Zheng, Yanfang & Huang, Weixiang, 2017. "Competitive advantage of qualified WEEE recyclers through EPR legislation," European Journal of Operational Research, Elsevier, vol. 257(2), pages 641-655.
    15. Wu, Kuo-Jui & Liao, Ching-Jong & Tseng, Ming-Lang & Chiu, Anthony S.F., 2015. "Exploring decisive factors in green supply chain practices under uncertainty," International Journal of Production Economics, Elsevier, vol. 159(C), pages 147-157.
    16. Li, Ling & Wang, Bin & Cook, David P., 2014. "Enhancing green supply chain initiatives via empty container reuse," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 70(C), pages 190-204.

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