Incentive Decision for Supply Chain with Corporate Social Responsibility and Lag Effect

Abstract

With the deepening of economic globalization and international division of labor, enterprises gradually turn to supply chain management methods that aiming at win-win cooperation. An enterprise’s corporate social responsibility (CSR) behaviors will affect the interests of other enterprises in the supply chain through transmission, diffusion, amplification, feedback, etc. Therefore, scholars are currently focusing on helping supply chain enterprises to take social responsibility. This paper takes a two-echelon supply chain as an example, which is composed of one manufacturer and one retailer. Considering the influence of lag effect on the performance level of corporate social responsibility, we discuss the optimal strategy of corporate social responsibility in supply chain under centralized and decentralized decision-making. Three incentive models are proposed to improve the implementation effect of decentralized supply chain decision. Study finds that, in real life, decentralized supply chain is more in line with the decision-making mode of supply chain participants, even though centralized decision-making has better operation effect. Under certain circumstances, the mixed contract, which is composed of advertising cooperation, cost sharing and revenue sharing, could lead to supply chain coordination. As an external stakeholder, the government’s subsidy plays a positive role in promoting the fulfillment of corporate social responsibility. Multi-subsidy performs better than single-subsidy. Although the time lag promotes the manufacturer’s social responsibility efforts and the retailer’s advertising, it somehow compromises overall profit of the supply chain. Therefore, manufacturers should try to reduce the lag effect to maintain the overall profitability of the supply chain.

Firm Performance and Corporate Social Responsibility: Spatial Context and Effect Mechanism

“…Return on assets (ROA) is a commonly used indicator of financial performance (Godos-Dı´ez et al, 2014). Previous studies have shown that the effect of antecedents on CSR often has a time lag effect (Cheng & Ding, 2020). Therefore, in addition to the current ROA (ROA in 2018), because of possible endogenous issues, we also use the 1-year lag of ROA (ROAFL), 2-year lag of ROA (ROASL), and 3-year lag of ROA (ROATL) as independent variables, separately.…”

Impact of corporate social responsibility on carbon emission reduction in supply chains

“…CSR can consider not only the development of individual enterprises but also the realisation of CSR in the entire supply chain (Bhardwaj, 2016). Cheng and Ding (2020) believe that, in an increasingly competitive environment, the supply chain model has become the mainstream mode of sustainable development of enterprises. Li (2020) studied the impact of credit support, government subsidies and internal cost subsidies on supply chain CSR decision-making.…”

Corporate social responsibility in long‐term supply chain management

“…Recent studies on supply chain CSR mainly concentrated on the following three aspects. Debates were proposed on how to promote CSR among different types of supply chain enterprises, such as two‐echelon supply chain (Cheng & Ding, 2020; Jokar & Hosseini‐Motlagh, 2020; Panda et al, 2017; Wang, 2020), three‐echelon supply chain (Hosseini‐Motlagh, Govindan, et al, 2019), closed‐loop supply chain (Modak et al, 2019; Modak & Kelle, 2019; Wang et al, 2021), dual‐channel supply chain (Hosseini‐Motlagh, Nouri‐Harzvili, et al, 2019; Li et al, 2020) and green supply chain (Huang et al, 2021; Wang, Wang, & Zhang, 2020). For example, Asif et al (2013) presented a framework that can help the effective integration of CSR and existing business processes.…”

“…Corporate social responsibility (CSR) construction is essential for supply chains, enterprises, and society (Cheng & Ding, 2020; Fontoura & Coelho, 2021; Lee & Jung, 2016), because how enterprises actively shoulder social responsibility is related to the development of the national economy (McWilliams & Siegel, 2001). As the performance of one‐time high‐input CSR projects is usually lower than that of continuous medium‐to‐long term CSR projects under the same cost (Hollingworth & Valentine, 2014), it is more valuable from a long‐term perspective.…”