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Green innovation in logistics service supply chain: the impacts of relationship strength and overconfidence

Author

Listed:
  • Di Wang

    (Shanxi University of Finance and Economics)

  • Weihua Liu

    (Tianjin University)

  • Yanjie Liang

    (Tianjin University)

Abstract

Green innovation in the logistics industry is critical to mitigating environmental crises and ensuring sustainable development. In this study, a two-echelon logistics service supply chain (LSSC) is constructed consisting of a logistics service provider (LSP), a logistics service integrator (LSI), and customers. The LSP and the LSI collaborate to provide high-quality green logistics service products (GLSPs) to customers. Strategic cooperation is established between upstream and downstream enterprises in the form of supportive investment and cost-sharing to strengthen inter-organizational relationships; the LSI may show overconfidence in both the impact of his green innovation effort on demand expansion and control power in the vertical LSSC. By solving the LSI-led Stackelberg game, we find that: First, the innovation cost coefficients and the payment ratio affect optimal decisions, including the optimal level of GLSP design innovation, level of GLSP delivery innovation, price of the GLSP, and LSI's optimal expected utility. Second, relationship strength positively impacts optimal decisions; its impact on the LSI's optimal expected utility is related to the upper limit of the LSI's supportive investment for the LSP. Third, the LSI's overconfidence positively impacts the optimal decisions and the LSI's optimal expected utility, while it harms the LSI's optimal real utility; the impacts of the LSI's overconfidence and inter-organizational relationship strength are additive. Finally, a "green subsidy and loss-sharing" incentive contract is proposed, which can improve both the levels of design and delivery innovation, as well as the LSSC members' real utilities. The findings may provide new insights for LSSC green innovation practitioners.

Suggested Citation

  • Di Wang & Weihua Liu & Yanjie Liang, 2024. "Green innovation in logistics service supply chain: the impacts of relationship strength and overconfidence," Annals of Operations Research, Springer, vol. 343(3), pages 949-979, December.
    • Handle: RePEc:spr:annopr:v:343:y:2024:i:3:d:10.1007_s10479-022-04621-7
    DOI: 10.1007/s10479-022-04621-7
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    References listed on IDEAS

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