A coordination mechanism through cost sharing of corporate social responsibility and government subsidy in a two-echelon supply chain
Journal of Business & Industrial Marketing
ISSN: 0885-8624
Article publication date: 11 March 2021
Issue publication date: 3 January 2022
Abstract
Purpose
This paper aims to deal with the coordination problem of the supply chain through cost sharing of corporate social responsibility (CSR) and government subsidy.
Design/methodology/approach
With respect to the coordination problem of the supply chain with CSR, this paper constructs a three-stage game model consisting of a dominant retailer, n suppliers and government. From the perspective of cost sharing and government subsidies, this paper discussed the decentralized and centralized decision-making, respectively. On this basis, this paper designed a coordination mechanism considering both cost sharing and government subsidies and explore the impact of cost sharing rate and government subsidy rate on CSR efforts, members’ profits and social welfare.
Findings
CSR can improve the profits of supply chain members and the overall performance of the supply chain. Then the profits of supply chain nodal enterprises will be affected by the fulfillment level of CSR of their partners. Furthermore, excessive CSR will erode the supply chain profits and cause resource waste. High CSR costs often make retailers low CSR effort level, while a high CSR cost sharing rate can reduce the profits of suppliers and the supply chain. In addition, excessive government subsidies will lead to the decline of social welfare. Excessive government subsidies will cause the dependence of enterprises and affect their operating efficiency.
Practical implications
The proposed coordination mechanism can effectively do with the coordination problem of the supply chain.
Originality/value
The proposed coordination mechanism considering cost sharing and government subsidies simultaneously can effectively deal with conflict problems and guarantee the supply chain members and the supply chain to maximize their profits and social welfare.
Keywords
Acknowledgements
This work is partially funded by the National Natural Science Foundation of China (71503103); the Humanities and Social Sciences of Education Ministry (17YJC630224); Jiangsu University Natural Science Foundation Project (18KJB120010); Major Project University Philosophy and Social Sciences in Jiangsu Province of China (2017ZDIXM034); the Fundamental Research Funds for the Central Universities (2019JDZD06) and Research Project from Jiangsu Association of Science and Technology (JSKXKT 2020023) and the Tender Project from Wuxi Federation of Philosophy and Social Sciences (WXSK20-A-08) and Soft Science Foundation of Wuxi city (KX-20-A02). Even so, this work does not involve any conflict of interest.
Citation
Liu, Y., Ren, W., Xu, Q. and Liu, Z. (2022), "A coordination mechanism through cost sharing of corporate social responsibility and government subsidy in a two-echelon supply chain", Journal of Business & Industrial Marketing, Vol. 37 No. 1, pp. 29-46. https://doi.org/10.1108/JBIM-03-2020-0148
Publisher
:Emerald Publishing Limited
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