| Title | Closed loop supply chain pricing and emission reduction decisions considering blockchain and CSR investment |
| Author | LIANG Xi; WEI Guanghe; YANG Chenghu |
| Abstract | In light of the global promotion for emission reductions and green development, researches in the field of closed-loop supply chain management are increasingly focusing on achieving carbon reduction and resources recovery throughout products′ entire lifecycles. Blockchain technology has become as a crucial device in this context due to its distinct advantages, including enhancing supply chain transparency, improving product traceability, and building trust among stakeholders. These capabilities make blockchain into a valuable component in closed-loop supply chain management, particularly as companies aim to meet sustainability goals and maintain a competitive edge. At the same time, Corporate Social Responsibility (CSR) serves as a significant strategy for enterprises, facilitating their sustainable development objectives while also improving their market positioning and brand reputation. In addition, CSR is a key factor in decision-making processes within closed-loop supply chains. However, the choices that enterprises make, regarding the adoption of blockchain technology and their approach to CSR investments, can considerably make a great impact on pricing strategies, and decisions of carbon emission reduction of the overall closed-loop supply chain. Accordingly, this paper investigates a closed-loop supply chain system that consists of a single manufacturer, a single retailer, and a single third party. Based on the adoption of blockchain technology and different CSR investment approaches by these entities, the study categorizes the closed-loop supply chain into four distinct models. By employing a Stackelberg game model, the research performs a comparative analysis of several critical parameters: the level of consumer distrust regarding product sources, the costs associated with blockchain technology adoption, the consumer preference coefficients for low-carbon products, and the carbon reduction cost coefficients. This analysis seeks to understand how these parameters influence pricing strategies, and carbon reduction of the overall closed-loop supply chain. The findings indicate that:Without adopting blockchain technology, consumers′ distrust of product origins is relatively low. CSR investments by manufacturers can lead to higher welfare outcomes for the manufacturer, retailer, and the overall supply chain system. In contrast, at the time, that blockchain technology is applied, and if the blockchain implementation costs, consumer low-carbon preference coefficients, and verification fees for recycled products maintained relatively low, CSR investments by the retailer can simultaneously enhance the welfare of the manufacturer, the retailer, and the entire system. Additionally, if consumer distrust of product provenance is high, the implementation of blockchain technology will bring results in increased carbon reduction levels. However, merely when the degree of consumer distrust in product provenance or the positive impact of carbon reduction levels on demand discount is high, or when the verification costs for recycling used products are low, the adoption of blockchain technology lead to higher profits for all members and increased overall system welfare. The research also reveals that regardless of whether blockchain technology adopted, the carbon reduction level is consistently higher when the retailer invests in CSR. It is proved that the third-party profits remain constantly when different members invest in CSR.As blockchain technology implementation costs rise, carbon reduction levels decrease regardless of which party invests in CSR. The third-party profit remains unaffected by blockchain technology investment costs. When the carbon reduction cost coefficient is relatively small, CSR investments by the retailer have a positive effect on increasing the welfare of the manufacturer, retailer, and the overall supply chain system. Furthermore, the study finds that the third-party profit decreases as the cost of the initial inspection for recycled products increases, regardless of which party invests in CSR. The manufacturer′s profits also diminish as the recycling inspection costs rise, irrespective of whether blockchain technology is adopted. Interestingly, the analysis shows that system welfare only increases when the retailer invests in CSR without the implementation of blockchain technology. In all other scenarios, system welfare tends to decline. If the initial inspection cost for recycling is relatively low, the manufacturer′s profit and system welfare are higher when blockchain technology is employed.By integrating CSR and blockchain technology into closed-loop supply chain management, enterprises can gain a competitive advantage while contributing to global sustainability goals. Ultimately, the findings provide a comprehensive framework for enterprises aiming to optimize their closed-loop supply chains. By strategically managing blockchain technology investments and CSR initiatives, and aligning these efforts with consumer behavior and environmental sustainability goals, businesses can maximize system welfare while ensuring that carbon reduction and resource recovery efforts are effectively integrated into their operations. This contributes to the broader objectives of green development and long-term competitiveness in the global marketplace. |
| Keywords | Closed loop supply chain; Blockchain; CSR; Price; Emission reduction |
| Issue | Vol. 39, No. 4, 2025 |
Title
Closed loop supply chain pricing and emission reduction decisions considering blockchain and CSR investment
Author
LIANG Xi; WEI Guanghe; YANG Chenghu
Abstract
In light of the global promotion for emission reductions and green development, researches in the field of closed-loop supply chain management are increasingly focusing on achieving carbon reduction and resources recovery throughout products′ entire lifecycles. Blockchain technology has become as a crucial device in this context due to its distinct advantages, including enhancing supply chain transparency, improving product traceability, and building trust among stakeholders. These capabilities make blockchain into a valuable component in closed-loop supply chain management, particularly as companies aim to meet sustainability goals and maintain a competitive edge. At the same time, Corporate Social Responsibility (CSR) serves as a significant strategy for enterprises, facilitating their sustainable development objectives while also improving their market positioning and brand reputation. In addition, CSR is a key factor in decision-making processes within closed-loop supply chains. However, the choices that enterprises make, regarding the adoption of blockchain technology and their approach to CSR investments, can considerably make a great impact on pricing strategies, and decisions of carbon emission reduction of the overall closed-loop supply chain. Accordingly, this paper investigates a closed-loop supply chain system that consists of a single manufacturer, a single retailer, and a single third party. Based on the adoption of blockchain technology and different CSR investment approaches by these entities, the study categorizes the closed-loop supply chain into four distinct models. By employing a Stackelberg game model, the research performs a comparative analysis of several critical parameters: the level of consumer distrust regarding product sources, the costs associated with blockchain technology adoption, the consumer preference coefficients for low-carbon products, and the carbon reduction cost coefficients. This analysis seeks to understand how these parameters influence pricing strategies, and carbon reduction of the overall closed-loop supply chain. The findings indicate that:Without adopting blockchain technology, consumers′ distrust of product origins is relatively low. CSR investments by manufacturers can lead to higher welfare outcomes for the manufacturer, retailer, and the overall supply chain system. In contrast, at the time, that blockchain technology is applied, and if the blockchain implementation costs, consumer low-carbon preference coefficients, and verification fees for recycled products maintained relatively low, CSR investments by the retailer can simultaneously enhance the welfare of the manufacturer, the retailer, and the entire system. Additionally, if consumer distrust of product provenance is high, the implementation of blockchain technology will bring results in increased carbon reduction levels. However, merely when the degree of consumer distrust in product provenance or the positive impact of carbon reduction levels on demand discount is high, or when the verification costs for recycling used products are low, the adoption of blockchain technology lead to higher profits for all members and increased overall system welfare. The research also reveals that regardless of whether blockchain technology adopted, the carbon reduction level is consistently higher when the retailer invests in CSR. It is proved that the third-party profits remain constantly when different members invest in CSR.As blockchain technology implementation costs rise, carbon reduction levels decrease regardless of which party invests in CSR. The third-party profit remains unaffected by blockchain technology investment costs. When the carbon reduction cost coefficient is relatively small, CSR investments by the retailer have a positive effect on increasing the welfare of the manufacturer, retailer, and the overall supply chain system. Furthermore, the study finds that the third-party profit decreases as the cost of the initial inspection for recycled products increases, regardless of which party invests in CSR. The manufacturer′s profits also diminish as the recycling inspection costs rise, irrespective of whether blockchain technology is adopted. Interestingly, the analysis shows that system welfare only increases when the retailer invests in CSR without the implementation of blockchain technology. In all other scenarios, system welfare tends to decline. If the initial inspection cost for recycling is relatively low, the manufacturer′s profit and system welfare are higher when blockchain technology is employed.By integrating CSR and blockchain technology into closed-loop supply chain management, enterprises can gain a competitive advantage while contributing to global sustainability goals. Ultimately, the findings provide a comprehensive framework for enterprises aiming to optimize their closed-loop supply chains. By strategically managing blockchain technology investments and CSR initiatives, and aligning these efforts with consumer behavior and environmental sustainability goals, businesses can maximize system welfare while ensuring that carbon reduction and resource recovery efforts are effectively integrated into their operations. This contributes to the broader objectives of green development and long-term competitiveness in the global marketplace.
Keywords
Closed loop supply chain; Blockchain; CSR; Price; Emission reduction
Issue
Vol. 39, No. 4, 2025
References