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Green technology operation subsidy vs. investment subsidy in agricultural outsourcing services: The impact of power structures

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  • Shi, Ligang
  • Chen, Weida
  • Jia, Jing

Abstract

To encourage service subjects to provide green technology services to farmers, the government offers two subsidy policies: the green technology operation subsidy (GOS) and the green technology investment subsidy (GIS). We consider an agricultural supply chain with a risk-averse farmer, a risk-neutral retailer, and a risk-neutral service subject, and comparatively analyze the impacts of subsidy policies in a service subject-led Stackelberg, a retailer-led Stackelberg, and a vertical Nash game model. The results reveal that under GOS, farmers prefer the vertical Nash (retailer-led) model when the subsidy level is low (high). In contrast, under GIS, the vertical Nash model always outperforms Stackelberg models for farmers. Further analysis shows that with an equal subsidy budget, farmers always gain more from GOS in the service subject-led model, but in other models, they prefer GIS when the subsidy budget is low. In addition, service subjects tend to adopt GIS (GOS) in the vertical Nash (service subject-led) model. However, in the retailer-led model, service subjects only choose GOS when both farmers' risk aversion and subsidy budget are high. Finally, farmers and retailers share the same preference for subsidy policies, while service subjects' preference is consistent with that of the supply chain system.

Suggested Citation

  • Shi, Ligang & Chen, Weida & Jia, Jing, 2026. "Green technology operation subsidy vs. investment subsidy in agricultural outsourcing services: The impact of power structures," International Journal of Production Economics, Elsevier, vol. 293(C).
    • Handle: RePEc:eee:proeco:v:293:y:2026:i:c:s0925527326000083
    DOI: 10.1016/j.ijpe.2026.109917
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    References listed on IDEAS

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