Corporate social responsibility investment and coordination in asymmetric competitive supply chains with horizontal interactions

Corporate social responsibility (CSR) has received extensive attention in the automobile industry. This study, following the operational features of the automobile industry, develops a model of two competing supply chains to examine the effects of horizontal interactions, asymmetric base demand share status, and product substitution on the efficiency of manufacturer CSR and retailer CSR. Most studies suggest that CSR is detrimental to the CSR performer but beneficial to the channel partner who does not perform CSR. However, our analysis demonstrates that whether CSR benefits the CSR performer and the channel partner is related to the horizontal interactions of the rival channel’s CSR strategy, disparities in base market share status, and the degree of competition. Moreover, the widely adopted revenue-sharing contract cannot fully coordinate the CSR conflict, while our proposed subsidy strategy works well. Additionally, our work shows that consumer utility and social welfare as a whole are higher under retailer CSR than under manufacturer CSR. Most notably, this study partially explains why some larger firms in practice frequently engage in CSR while some smaller ones do not, as well as why some larger firms undertake CSR even though it might be disadvantageous for them.