The Impact of Government Subsidies on Private Pension Enterprises: A Decision-Making Model Based on Their CSR Levels

Abstract

With a rapidly aging society, the Chinese pension industry has faced great pressure due to the increasing demand for elderly care and medical products. Due to the limited resources and capabilities of Chinese social organizations, which currently play an important role in elderly care, it is necessary to encourage more private enterprises to enter the pension industry and thus provide significantly more products to all elderly people. This study aimed to explore the extent to which government subsidies may incentivize private enterprises to enter the pension industry. In contrast to previous studies, the level of corporate social responsibility (CSR), social value, and service quality of an enterprise were considered in this study as factors that influence the decision of whether to enter the pension industry. By constructing a theoretical model, three different government subsidy strategies, namely, no subsidy, subsidy to enterprises, and subsidy to consumers, were analyzed, especially their impacts on the social and economic values of enterprises. Our theoretical and simulation results show that the impact of government subsidies is related to its level of CSR. As the CSR level is relatively high, it is more effective to grant subsidies to customers than to enterprises. Moreover, by comparing the optimal price, service quality, and demand of the three subsidy strategies, we find that subsidies to enterprises and customers will lead to the highest service quality and highest market demand, respectively.INDEX TERMS Government subsidy, private pension enterprise, elderly, service quality, corporate social responsibility.

Evolutionary game analysis of community elderly care service regulation in the context of “Internet +”

“…Wang et al ( 27 ) presented the problems in community elderly care through semi-structured interviews and provided some recommendations, including establishing a platform for government-citizen dialogue and establishing a sound monitoring and evaluation mechanism. Jiang et al ( 28 ) analyzed the impact of government subsidies on the willingness of enterprises to provide high-quality services. Wang and Cui ( 29 ) discussed the impact of dynamic reward or penalty mechanisms on the self-discipline behavior of elderly care institutions.…”

Knowledge Structure and Evolution of Elderly Care Services: A Visualized Analysis

“…At the same time, due to the finite capabilities of the government, plenty of private enterprises pour into the pension industry. Scholars put high value on the reasons for the elderly care marketization [73], factors for private enterprises' entry in the pension industry [74], and performance evaluation of private pension enterprises [17]. Further, from the point of government-enterprise cooperation, some scholars have a heated debate on the risk assessment of the governments' procurement from private providers [75] and optimal subsidy for the endowment services marketization [22].…”

Comply or evade: factors influencing private enterprises’ basic old-age insurance responsibilities

“…Studying the factors that affect private enterprises’ fulfillment of their pension obligations is of significant importance. However, existing academic empirical research in this area remains scarce ( 8 ) for two main reasons. First, old-age insurance is a fundamental element within the social security framework, and with clear government regulations, enterprises will consciously comply with these regulations.…”