This paper considers a supply chain in which an upstream supplier sells a component to a downstream manufacturer facing a price and quality sensitive demand. The supplier has a chance to make investment in the manufacturer, which can not only enable the supplier to hold equity shares in the manufacturer and thus achieve profit sharing with the manufacturer, but also provide resources for the manufacturer to improve its product quality. Under any given investment strategy of the supplier, the equilibrium decisions of the two chain members on wholesale price and profit margin are characterized. Then, the supplier's optimal investment strategy is derived. The paper considers three competition models: supplier Stackelberg (SS), manufacturer Stackelberg (MS), and vertical Nash (VN) models, which correspond to different market power structures. The paper shows that the investment can always increase the market demand. Moreover, in both the SS and VN models, the value of the supplier's investment for the entire supply chain, comes from not only the quality improvement but also the profit sharing caused by equity holding; while in the MS model, the investment value comes only from the quality improvement.

中文翻译：

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通过持股，供应商对制造商质量改善的投资

本文考虑了一个供应链，其中上游供应商向面临价格和质量敏感需求的下游制造商出售组件。供应商有机会对制造商进行投资，这不仅使供应商能够持有制造商的股权，从而与制造商实现利润共享，而且还为制造商提供了改善其产品质量的资源。在供应商的任何给定投资策略下，特征在于两个链成员在批发价格和利润率上的均衡决策。然后，得出供应商的最佳投资策略。本文考虑了三种竞争模型：供应商Stackelberg（SS），制造商Stackelberg（MS）和垂直Nash（VN）模型，它们分别对应于不同的市场力量结构。本文表明，投资总能增加市场需求。此外，在SS和VN模型中，供应商在整个供应链中的投资价值不仅来自质量的提高，还归因于股权持有带来的利润分享。而在MS模型中，投资价值仅来自质量提高。