Long-term decision-making for green supply chains based on digital transformation under government intervention

The integration of digitalization and green transformation is a key driver of sustainable supply chain development. This study examines a three-echelon supply chain consisting of a supplier, a manufacturer, and a retailer, considering long-term strategic interactions among members under dual transformation. The model focuses on their optimal investments in digital transformation, green transformation, and green advertising. Consumer digital preference (CDP) and consumer green preference (CGP) are incorporated as demand drivers, while government intervention is introduced to alleviate the financial burden on upstream firms and incentivize their proactive engagement in digital and green transformation. A differential game framework is developed to derive equilibrium strategies under six decision scenarios, ranging from non-cooperative behavior to multiple cooperation schemes, including unilateral and bilateral cost-sharing mechanisms. The research adopts Stackelberg differential game theory, sensitivity analysis, and numerical experiments to achieve the goal. The findings reveal that the digitalization level evolves monotonically, while greening levels are generally non-monotonic over time. Higher CDP and CGP significantly enhance digitalization, greening effort, and overall supply chain performance. Moreover, bilateral cost-sharing schemes outperform unilateral arrangements by improving economic efficiency and environmental outcomes, while unilateral schemes may disproportionately benefit the retailer. This study provides a comprehensive theoretical foundation for coordinating digitalization-driven green supply chain (DDGSC). The insights offer practical guidance for enterprises seeking to jointly leverage digital and green investments and for policymakers designing effective incentive mechanisms to promote sustainable development.