Supply Chain Consequences of Subsidies for Corporate Social Responsibility

• 成果类型: Article
• 署名作者: Arya, Anil; Mittendorf, Brian
• 署名单位: University System of Ohio; Ohio State University
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/poms.12326
• 发表日期: 2015
• 页码: 1346-1357
• 关键词: corporate social responsibility; philanthropy; pricing; Supply chains

摘要

The use of government incentives tied to market prices as means of boosting corporate social responsibility (CSR) has expanded notably in recent decades. Enhanced business tax deductions for charitable donations and credits for conservation easements are notable cases. While providing incentives for socially desirable behavior to achieve legislative goals has intuitive appeal, the broader economic consequences are not always fully understood. In this study, we examine such wider consequences for supply chains when subsidies for CSR are offered. One effect we identify is that since incentives are typically tied to market value, firms have not only an added incentive to achieve societal objectives (say by donating inventory) but also an incentive to raise output (retail) market prices. A second consequence is that since firms forgo potential revenues by engaging in socially desired behavior, they become increasingly sensitive to supplier pricing; in an uncoordinated supply chain this leads to input (wholesale) price concessions. Among other things, the results underscore that incentives put in place to meet broader societal objectives also have notable ramifications for suppliers, retailers, and consumers in primary markets.