Impact of Altruistic Preference and Government Subsidy on the Multinational Green Supply Chain under Dynamic Tariff

Abstract

A surge in tariffs poses an enormous challenge to the development of multinational green supply chains, which could be mitigated by altruistic preferences and government subsidies. By developing a Stackelberg game analytical framework and designing different scenarios, we deduce the stakeholder’s optimal solutions in each case and compare them to evaluate the impact of manufacturer altruistic preferences and government subsidies on the multinational green supply chain under dynamic tariff. Then we show that: (i) with the increasing tariff rates, either altruistic preferences or government subsidies can promote the green supply chain. (ii) No matter what strategy adopts in the supply chain, it is beneficial to the retailer while harmful to the manufacturer with altruistic preference. (iii) Government subsidies or altruism preferences will lead to free-riding, but the former is conducive to the stable supply chain. (iv) Compared with the production cost subsidy, the green R&D subsidy encourages the green level, but the former contributes to increasing the participant profits. (v) Subsidies and altruistic preference, which simultaneously work in the supply chain, will further boost the greening but aggravate the manufacturer's loss and destroy the supply chain stability. To further enhance the green level and the participant revenue, we also propose the contracts of two-part tariff and profit-sharing to coordinate the supply chain. Lastly, we perform a comparative analysis of the different scenarios utilizing numerical examples and formulate managerial insights accordingly.