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Policy of Government Subsidy for Supply Chain with Poverty Alleviation

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  • Haiyan Li

    (School of Management and Economics, University of Electronic Science and Technology of China, Chengdu 611731, China
    School of Management, Chongqing University of Technology, Chongqing 400054, China)

  • Xingzheng Ai

    (School of Management and Economics, University of Electronic Science and Technology of China, Chengdu 611731, China)

  • Han Song

    (School of Management, Chongqing University of Technology, Chongqing 400054, China)

  • Yi He

    (School of Management, Hainan University, Haikou 570228, China)

  • Xue Zeng

    (Kunming Shipbuilding Equipment Co., Ltd., Kunming 650236, China)

  • Jiafu Su

    (International College, Krirk University, Bangkok 10220, Thailand)

Abstract

Government subsidy is a common practice in poverty alleviation. We used game theory and the mathematical model of operations management to investigate the efficiency of subsidy with different poverty scales when the firm owns the decision power of the wholesale price. Comparative analysis of the equilibrium solutions demonstrated the following results: Exclusive subsidy has a significant effect on the payoff of the poor farmer, but the dilemma is that the increase in the payoff of the poor farmer is against the payoff decrease of the regular farmer. Sharing subsidy has a counterbalancing effect on the payoff of the poor and regular farmers. Co-subsidy is the best for consumer surplus and social welfare, but it has little effect on improving the poor farmer’s payoff. Generally, when the poor farmers are in the majority, sharing subsidies or co-subsidy is more reasonable than exclusive subsidy. When the poor farmers are in the minority, exclusive or sharing subsidies will be more economical for the government than co-subsidy. Our research helps the government recognize that spending more money may achieve a poor result in poverty alleviation and help the firm realize that it is better to give more subsidies to the poor farmer than to itself. The highlights of the paper are as follows. Firstly, our work provides a new perspective in supply chain operations management with poverty alleviation by considering the participation of the poor and regular farmers together; secondly, the poverty scale is introduced into the mathematical model; thirdly, we pay attention to the impact of government subsidy to enterprise on the payoff of the poor farmer.

Suggested Citation

  • Haiyan Li & Xingzheng Ai & Han Song & Yi He & Xue Zeng & Jiafu Su, 2022. "Policy of Government Subsidy for Supply Chain with Poverty Alleviation," Sustainability, MDPI, vol. 14(19), pages 1-22, October.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:19:p:12808-:d:935824
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    References listed on IDEAS

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    1. Ying Wu & Haiyan Li & Qinglong Gou & Jibao Gu, 2017. "Supply chain models with corporate social responsibility," International Journal of Production Research, Taylor & Francis Journals, vol. 55(22), pages 6732-6759, November.
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    3. Zhen Li & Jiao Zhang & Qingfeng Meng & Wei Zheng & Jianguo Du, 2019. "Influence of Government Subsidy on Remanufacturing Decision under Different Market Models," Mathematical Problems in Engineering, Hindawi, vol. 2019, pages 1-16, July.
    4. Jaehyung An & Soo-Haeng Cho & Christopher S. Tang, 2015. "Aggregating Smallholder Farmers in Emerging Economies," Production and Operations Management, Production and Operations Management Society, vol. 24(9), pages 1414-1429, September.
    5. Abhijit Barman & Rubi Das & Pijus Kanti De & Shib Sankar Sana, 2021. "Optimal Pricing and Greening Strategy in a Competitive Green Supply Chain: Impact of Government Subsidy and Tax Policy," Sustainability, MDPI, vol. 13(16), pages 1-20, August.
    6. Tang, Christopher S. & Zhou, Sean, 2012. "Research advances in environmentally and socially sustainable operations," European Journal of Operational Research, Elsevier, vol. 223(3), pages 585-594.
    7. Yang, Xiaolei & He, Lingyun & Xia, Yufei & Chen, Yufeng, 2019. "Effect of government subsidies on renewable energy investments: The threshold effect," Energy Policy, Elsevier, vol. 132(C), pages 156-166.
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    1. Jielin Jing & Jianling Wang & Qingjun Wu, 2022. "Litigation Risk and Corporate Social Responsibility—Evidence from a Poverty Alleviation Campaign in China," Sustainability, MDPI, vol. 14(22), pages 1-21, November.

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