The Strategies of the Poverty-Alleviation Supply Chain with Government Subsidies and Cost Sharing: Government-Led or Market-Oriented?

Kai Kang, Xinfeng Luan, Wenjing Shen, Yanfang Ma and Xuguang Wei
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Kai Kang: School of Economics and Management, Hebei University of Technology, Tianjin 300401, China
Xinfeng Luan: School of Economics and Management, Hebei University of Technology, Tianjin 300401, China
Wenjing Shen: LeBow College of Business, Drexel University, Philadelphia, PA 19104, USA
Yanfang Ma: School of Economics and Management, Hebei University of Technology, Tianjin 300401, China
Xuguang Wei: School of Economics and Management, Hebei University of Technology, Tianjin 300401, China

Sustainability, 2020, vol. 12, issue 10, 1-24

Abstract: Alleviating poverty is a critical problem in many developing countries such as China. In this paper, we consider a poverty-alleviation supply chain composed of one supplier in a poor area and one producer helping the supplier reduce poverty by fulfilling Corporate Social Responsibility (CSR). Our work aims at examining the impacts of government subsidies and Corporate Social Responsibility (CSR) on the poverty-alleviation operations. Four game-theoretic models are constructed and analyzed to investigate the impacts of coefficients of government subsidies and CSR cost sharing on the supplier’s and producer’s profits, social welfare growth, CSR level, wholesale price, output of the supplier, and retail price. Our findings suggest that the most effective poverty-alleviation mechanism in most cases is the combination of government subsidies and market efforts. Contrary to common beliefs that companies have to sacrifice profit for social responsibility, we show that poverty alleviation is reconcilable with profit maximization and social welfare improvement, and companies can achieve a win-win situation of both poverty alleviation and profitability. Our work provides new insights for sustainable poverty alleviation and socially sustainable operations.

Keywords: poverty-alleviation supply chain; corporate social responsibility (CSR); government subsidies; cost sharing (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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