The Strategic Choice Of A Firm’s Green Innovation Strategy Under Different Supply Chain Structures

With the rapid development of technology and economy,the green wave has been swept all around the world,and the development of green economy has been always focused on by China and even the world.As a key link in the process of the development of green economy,green innovation has become a major power for accelerating industrial transformation and upgrading,promoting high-quality and sustainable economic development,and achieving green growth.It has occupied an increasingly important position in the global economic development and played an important role in the development of firms,which has further promoted the reexamination and rethinking of the industrial firms on the industrial track.However,the substantial R&D investments in green innovation in the earlier stage hinders the green innovation practice process of the firms.Looking for suitable partners outside the firms to establish R&D cooperation maybe is a more effective way to realize the reduction of R&D costs.However,the roles of a firm in the original supply chain structures have changed subtly due to the achievement of the green innovation R&D cooperation,especially when the supply chain structures that a firm stayed in are different.As a result,the R&D cooperation makes the environment in which the firms are located more complicated.Under such a complex supply chain system,whether,how and when a firm should seek an external green innovation R&D cooperation has become a crucial/momentous decision-making issue.The strategic choice of a firm’green innovation strategy involves how to balance the trade-off between the positive effects and the negative effects of the R&D cooperation in different supply chain structures,so as to make more scientific decisions.The analysis both of the competition and cooperation game behind it is the fundamental basis for helping the firms on decision-making.Therefore,in line with the development trends of green economy in the world,the purpose of this thesis is to explore the optimal decision-making of the degree of greenness and the strategic choice of green innovation strategy under three different supply chain structures(horizontal,vertical and co-opetition),and the motivation behind them respectively.This thesis investigates the specific business cases of the firms regarding the investing in green innovation in the industry,and incorporates the characteristics both of the positive effects and the negative effects of R&D cooperation on a firm(that undertaking R&D task)under different supply chain structures.The main research work and contents of this thesis are as follows:(1)Under the horizontal supply chain structure,this thesis investigates whether and when a firm,with either an inferior or a superior brand to its competitor,should cooperate with that competitor to conduct green innovation,when facing consumers with green preferences.This thesis incorporates both the positive effects(a reduction in R&D costs)and the negative effects(more intense competition due to the reduction in product differentiation)of the R&D cooperation on the firm.The results show that:① For a firm,with either an inferior or a superior brand,cooperation with the competitor does not always lead it to produce a greener product.②Cooperation with the competitor on green innovation dominates only when:the green innovation cost-effectiveness(which is simultaneously impacted by the consumers’ green preference,the R&D cost,and the variable cost of each degree of enhanced greenness of the product)is not too large;the brand differentiation gap between the two firms is large,or a large proportion of the R&D cost is borne by the competitor.Otherwise,conducting green innovation alone always dominates.(2)Under the vertical supply chain structure,based on the government fund policy,this thesis investigates whether and when a supplier should establish a vertical R&D cooperation with a downstream manufacturer to carry out remanufacturing innovation,when considering the consumer’ recognition of remanufactured products and the differentiation of technology transformation rate.This thesis incorporates both the positive effects(a reduction in key parts costs,reduction in R&D costs)and the negative effects(more intense competition due to the reduction in remanufactured product costs)of both the investing in remanufacturing innovation and the R&D cooperation on the firm.The results show as follows:① The vertical R&D cooperation can bring products with higher remanufacturing value,but it is not always the optimal strategy for the firm.In addition,the policy intervention by the government fund policy cannot always effectively incentive the firm to actively choose the R&D cooperation with the downstream manufacturer.② In the case of the used components has not been fully applied in the components remanufacturing,when consumers’ recognition of remanufactured products is relatively lower,or the remanufacturing innovation cost-effectiveness(which is simultaneously impacted by the R&D cost,and the supplier’s technology conversion rate)is not too large,whether a firm should choose the cooperation with the downstream manufacturer depends on the differentiation of the technology conversion rate exceeds the threshold.(3)Under the co-opetition supply chain structure,this thesis investigates whether and when a firm(undertaking the dual identities both of the supplier and the comptitor),with either an inferior or a superior brand to its co-opetitor,should cooperate with that the co-opetitor to conduct green innovation,when facing consumers with green preferences.This thesis incorporates both the positive effects(a reduction in R&D costs,the increasing revenue from the wholesale business)and the negative effects(more intense competition due to the reduction in product differentiation)of both the R&D cooperation and the co-opetiton relationships.①The results show that,no matter the inferior brands or the superior brands of the firm is,establishing green innovation R&D cooperation with the co-opetitors under the co-opetition supply chain structure may not make the products greener.②In addition,the "production and supply" relationships,maintained with competitors under the co-opetition supply chain structure,does not necessarily hinder the achievement of green innovation R&D cooperation.On the contrary,under certain conditions(e.g.,when the brand differentiation between firms is relatively small),it can be alleviated the intense competition intensity.③ When the production cost performance of the components is relatively lower(the value of the green innovation that brings to a firm only slightly higher than the variable cost),if the green innovation costeffectiveness is moderate level or above,the strategic choice of the firm with an inferior brand appears a reversal phenomenon,where "Cooperation-Noncooperation-Cooperation",as the brand differentiation expands gradually.Otherwise,conducting green innovation alone is more profitable for the firm.The research results above,to an extent,not only enrich and improve the related theory of the green supply chain management on the strategic choice of a firm’s green innovation strategy under the different supply chain structures,but also provide guidance for managers when deciding whether or not to cooperate with potential partners on green innovation projects and how to obtain the better benefits,when facing "Competition and R&D Cooperation"," Supply and R&D Cooperation",or "Competition,Supply,and R&D Cooperation" relationships.