Research on the impact of government subsidy policies and channel structures on closed - loop supply chain considering consumers' green preference

Abstract

The development of circular economy hinges on remanufacturing, and government subsidies for remanufacturing significantly influence Closed - Loop Supply Chain (CLSC) operations. Given the complexity of CLSC structures and subsidy policies, understanding their impacts is crucial for optimizing sustainable practices. This study employs a single-cycle steady-state model to analyze the mature stage of the product life cycle under stable market demand. A secondary CLSC system is established, involving the government, manufacturers, retailers, potential third-party (3P) retailers, and consumers. Four scenarios combining sales channel structures and subsidy policies are examined: two single-channel structures and two dual-channel structures, which government allocating subsidies to different recipients (manufacturers or consumers). Through a two-level CLSC Stackelberg game model, the research explores (1) optimal decision-making among supply chain members, (2) the impact of subsidy types on pricing strategies and profit distribution, and (3) the synergistic effects of subsidies and consumer green preferences. Key findings indicate that subsidy policies exhibit distinct action mechanisms but share equivalent core economic outcomes within the same channel structure. A threshold subsidy level is identified to determine manufacturers’ strategic choice between single- and dual-channel sales. Numerical simulations demonstrate that both subsidy levels and green preferences significantly affect CLSC members’ profits, with subsidies exerting a more pronounced influence. This study also identifies limitations and proposes future research directions, including (1) incorporating third-party (3P) recyclers into the CLSC framework, (2) investigating the interaction between subsidy policies and consumer green preferences, and (3) analyzing CLSC pricing strategies under conditions of information asymmetry and fairness concerns.