Impact of government subsidy on the optimal R&D and advertising investment in the cooperative supply chain of new energy vehicles

Ya-Fang Sun, Yue-Jun Zhang () and Bin Su

Energy Policy, 2022, vol. 164, issue C

Abstract: Government subsidy is fairly important to alleviate the funding dearth of new energy vehicles (NEVs) industry, and mainly includes production-side and consumption-side subsidies. Nevertheless, it is unclear how government makes the optimal subsidy strategy at diverse research and development (R&D) stages of NEVs, and how the cooperative NEVs supply chain makes the optimal investment in R&D and advertising. Thus, this paper adopts the Stackelberg game, Nash equilibrium and the optimal profit models to address these issues and further conducts the case study with the NEVs data of BYD in China. The results indicate that when the effectiveness of per unit of investment in R&D (α) and advertising (β) in generating the sales of NEVs is lower than 0.574 in the region of 0<α2+β2<0.33, consumption-side subsidy can better improve the investment in R&D and advertising, profits and social welfare than production-side subsidy, but when it is lower than 1.414 in the region of 1<α2+β2<2, production-side subsidy may perform better. Meanwhile, to maximize social welfare, government pays the highest subsidy when adopting the consumption-side subsidy, followed by the subsidy for per unit production of NEVs and R&D investment, respectively. The case study further proves that the results support the practice.

Keywords: Government subsidy; R&D investment; Advertising investment; Profits of supply chain; Social welfare; New energy vehicles (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421522001100
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:164:y:2022:i:c:s0301421522001100

DOI: 10.1016/j.enpol.2022.112885

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().