IDEAS home Printed from https://ideas.repec.org/a/gam/jmathe/v12y2024i10p1433-d1389875.html
   My bibliography  Save this article

Manufacturer vs. Retailer: A Comparative Analysis of Different Government Subsidy Strategies in a Dual-Channel Supply Chain Considering Green Quality and Channel Preferences

Author

Listed:
  • Yan Xu

    (School of Business, Macau University of Science and Technology, Taipa 999078, Macao)

  • Yan Tian

    (Research Base of Cross-Border Flow Risk and Governance, Zhuhai School, Beijing Institute of Technology, Zhuhai 519088, China)

  • Chuan Pang

    (School of Business, Macau University of Science and Technology, Taipa 999078, Macao)

  • Huajun Tang

    (School of Business, Macau University of Science and Technology, Taipa 999078, Macao)

Abstract

As escalating environmental pollution results from economic development, the green supply chain is vital in enhancing ecological quality. In light of the rapid growth of online shopping, the dual-channel supply chain has gained significant popularity. Governments have implemented policies to achieve carbon peaks and neutrality worldwide. Considering green quality and channel preferences, this study constructs a Stackelberg model led by the manufacturer within a dual-channel supply chain to compare the effects under two government subsidy strategies. A Stackelberg game-theoretic approach is applied to analyze the model. The findings indicate the following: (1) Increases in the subsidy coefficient can increase product greenness and the overall profit in both subsidy strategies, which makes sense; (2) When direct sales channels become dominant, subsidizing the manufacturer proves superior to subsidizing the retailer in terms of promoting green quality and overall profit, which extends existing studies of government subsidy decisions. Furthermore, subsidizing the retailer may negatively affect the total supply chain profit; (3) Consistent with previous literature, intense competition between manufacturers and retailers is expected to enhance the overall profit of the supply chain; (4) Interestingly, customer preference for online channels does not influence product green quality under manufacturer subsidization strategies but exhibits a negative impact under retailer subsidization strategies. Finally, this research provides managerial implications for decision-makers and potential issues for future research.

Suggested Citation

  • Yan Xu & Yan Tian & Chuan Pang & Huajun Tang, 2024. "Manufacturer vs. Retailer: A Comparative Analysis of Different Government Subsidy Strategies in a Dual-Channel Supply Chain Considering Green Quality and Channel Preferences," Mathematics, MDPI, vol. 12(10), pages 1-28, May.
    • Handle: RePEc:gam:jmathe:v:12:y:2024:i:10:p:1433-:d:1389875
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7390/12/10/1433/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7390/12/10/1433/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ma, Wei-min & Zhao, Zhang & Ke, Hua, 2013. "Dual-channel closed-loop supply chain with government consumption-subsidy," European Journal of Operational Research, Elsevier, vol. 226(2), pages 221-227.
    2. Zhang, Linghong & Wang, Jingguo & You, Jianxin, 2015. "Consumer environmental awareness and channel coordination with two substitutable products," European Journal of Operational Research, Elsevier, vol. 241(1), pages 63-73.
    3. Cai, Gangshu (George), 2010. "Channel Selection and Coordination in Dual-Channel Supply Chains," Journal of Retailing, Elsevier, vol. 86(1), pages 22-36.
    4. Junyi Zhong & Jiazhen Huo, 2023. "How Does Green Store Brand Introduction Influence the Effects of Government Subsidy on Supply Chain Performance?," Mathematics, MDPI, vol. 11(14), pages 1-22, July.
    5. Jung, Seung Hwan & Feng, Tianjun, 2020. "Government subsidies for green technology development under uncertainty," European Journal of Operational Research, Elsevier, vol. 286(2), pages 726-739.
    6. Binbin He & Haiya Cai & Yingchen Ji & Siyu Zhu, 2023. "Supply Chain Green Manufacturing and Green Marketing Strategies under Network Externality," Sustainability, MDPI, vol. 15(18), pages 1-18, September.
    7. Sarkis, Joseph & Zhu, Qinghua & Lai, Kee-hung, 2011. "An organizational theoretic review of green supply chain management literature," International Journal of Production Economics, Elsevier, vol. 130(1), pages 1-15, March.
    8. Mitra, Supriya & Webster, Scott, 2008. "Competition in remanufacturing and the effects of government subsidies," International Journal of Production Economics, Elsevier, vol. 111(2), pages 287-298, February.
    9. Wenbo Shi & K. Jo Min, 2015. "Remanufacturing decisions and implications under material cost uncertainty," International Journal of Production Research, Taylor & Francis Journals, vol. 53(21), pages 6421-6435, November.
    10. Syed Abdul Rehman Khan & Arshian Sharif & Hêriş Golpîra & Anil Kumar, 2019. "A green ideology in Asian emerging economies: From environmental policy and sustainable development," Sustainable Development, John Wiley & Sons, Ltd., vol. 27(6), pages 1063-1075, November.
    11. Ghosh, Debabrata & Shah, Janat, 2012. "A comparative analysis of greening policies across supply chain structures," International Journal of Production Economics, Elsevier, vol. 135(2), pages 568-583.
    12. Wei-yu Kevin Chiang & Dilip Chhajed & James D. Hess, 2003. "Direct Marketing, Indirect Profits: A Strategic Analysis of Dual-Channel Supply-Chain Design," Management Science, INFORMS, vol. 49(1), pages 1-20, January.
    13. Maxime C. Cohen & Ruben Lobel & Georgia Perakis, 2016. "The Impact of Demand Uncertainty on Consumer Subsidies for Green Technology Adoption," Management Science, INFORMS, vol. 62(5), pages 1235-1258, May.
    14. Jafar Heydari & Kannan Govindan & Zahra Basiri, 2021. "Balancing price and green quality in presence of consumer environmental awareness: a green supply chain coordination approach," International Journal of Production Research, Taylor & Francis Journals, vol. 59(7), pages 1957-1975, April.
    15. Zhou, Yong-Wu & Guo, Jinsen & Zhou, Wenhui, 2018. "Pricing/service strategies for a dual-channel supply chain with free riding and service-cost sharing," International Journal of Production Economics, Elsevier, vol. 196(C), pages 198-210.
    16. Bian, Junsong & Zhang, Guoqing & Zhou, Guanghui, 2020. "Manufacturer vs. Consumer Subsidy with Green Technology Investment and Environmental Concern," European Journal of Operational Research, Elsevier, vol. 287(3), pages 832-843.
    17. Fahimnia, Behnam & Sarkis, Joseph & Davarzani, Hoda, 2015. "Green supply chain management: A review and bibliometric analysis," International Journal of Production Economics, Elsevier, vol. 162(C), pages 101-114.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Li, Jin & Wang, Haoyu & Shi, Victor & Sun, Qi, 2024. "Manufacturer's choice of online selling format in a dual-channel supply chain with green products," European Journal of Operational Research, Elsevier, vol. 318(1), pages 131-142.
    2. Dingzhong Feng & Lei Ma & Yangke Ding & Guanghua Wu & Ye Zhang, 2019. "Decisions of the Dual-Channel Supply Chain under Double Policy Considering Remanufacturing," IJERPH, MDPI, vol. 16(3), pages 1-20, February.
    3. Syed Asif Raza, 2022. "A bibliometric analysis of pricing models in supply chain," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 21(2), pages 228-251, April.
    4. Raza, Syed Asif & Govindaluri, Srikrishna Madhumohan, 2019. "Pricing strategies in a dual-channel green supply chain with cannibalization and risk aversion," Operations Research Perspectives, Elsevier, vol. 6(C).
    5. Heydari, Jafar & Bineshpour, Pegah & Walther, Grit & Ülkü, M. Ali, 2022. "Reconciling conflict of interests in a green retailing channel with green sales effort," Journal of Retailing and Consumer Services, Elsevier, vol. 64(C).
    6. Cai, Jianhu & Sun, Haining & Shang, Jennifer & Hegde, Gajanan G., 2023. "Information structure selection in a green supply chain: Impacts of wholesale price and greenness level," European Journal of Operational Research, Elsevier, vol. 306(1), pages 34-46.
    7. Li Liu & Zhe Wang & Jiangtao Xu & Zaisheng Zhang, 2023. "Green baton: how government interventions advance green technological innovation," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(10), pages 11121-11152, October.
    8. Fangfang Guo & Tao Zhang & Xiuquan Huang & Yaoguang Zhong, 2023. "Government Subsidy Strategies Considering Greenness on Agricultural Product E-Commerce Supply Chain," Mathematics, MDPI, vol. 11(7), pages 1-26, March.
    9. Haitao Chen & Zhaohui Dong & Gendao Li, 2020. "Government Reward-Penalty Mechanism in Dual-Channel Closed-Loop Supply Chain," Sustainability, MDPI, vol. 12(20), pages 1-15, October.
    10. Li, Jin & Hu, Zening & Shi, Victor & Wang, Qian, 2021. "Manufacturer's encroachment strategy with substitutable green products," International Journal of Production Economics, Elsevier, vol. 235(C).
    11. Renbang Shan & Li Luo & Baoli Shi, 2023. "The choice of recycling strategies for decision-makers based on government subsidy and service budget," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(2), pages 1441-1472, February.
    12. Duan, Housheng & Deng, Sijing & Song, Haiqing & Xu, Jiayan, 2021. "The impacts of sales efforts and mode of payment on the competition between agent and retailer," Omega, Elsevier, vol. 103(C).
    13. Golmohammadi, Amirmohsen & Kraft, Tim & Monemian, Seyedamin, 2024. "Setting the deadline and the penalty policy for a new environmental standard," European Journal of Operational Research, Elsevier, vol. 315(1), pages 88-101.
    14. Xue, Musen & Zhang, Jianxiong & Zhu, Guowei, 2020. "Quantity decision timing with spillover effect and asymmetric demand information," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 142(C).
    15. Sun, Cuiying & Zhang, Xiong & Zhou, Yong-Wu & Cao, Bin, 2022. "Pricing, financing and channel structure for capital-constrained dual-channel supply chains with product heterogeneity," International Journal of Production Economics, Elsevier, vol. 253(C).
    16. Gan Wan & Gang Kou & Tie Li & Feng Xiao & Yang Chen, 2020. "Pricing Policies in a Retailer Stackelberg O2O Green Supply Chain," Sustainability, MDPI, vol. 12(8), pages 1-16, April.
    17. Wei, Liqun & Zhang, Libin & Wei, Wanying & Chen, Xiaohong & Wang, Kai, 2024. "Working along both lines? The relationship between government green publicity and emissions tax," European Journal of Operational Research, Elsevier, vol. 317(1), pages 128-140.
    18. Xiaoxu Chen & Jingwei Wang & Peng Xu & Thomas Walker & Guoqiang Yang, 2023. "Emission Reduction and Channel Decisions in a Two-Echelon Supply Chain Considering Service Spillovers," Mathematics, MDPI, vol. 11(21), pages 1-27, October.
    19. Ata Allah Taleizadeh & Milad Shahriari & Shib Sankar Sana, 2021. "Pricing and Coordination Strategies in a Dual Channel Supply Chain with Green Production under Cap and Trade Regulation," Sustainability, MDPI, vol. 13(21), pages 1-18, November.
    20. Xing Yin & Xiaolin Chen & Xiaolin Xu & Lianmin Zhang, 2020. "Tax or Subsidy? Optimal Carbon Emission Policy: A Supply Chain Perspective," Sustainability, MDPI, vol. 12(4), pages 1-13, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jmathe:v:12:y:2024:i:10:p:1433-:d:1389875. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.