Abstract: International sustainable value chain collaboration is key to the sustainable development of international supply chains. This paper aims to address the issue of cross-border sustainable value chain collaboration under the bilateral intervention of governments, where the dynamic and stochastic characteristics of cross-governmental policy and power asymmetry are taken into account in modeling and analysis. Specifically, the various cross-governmental interaction parameters, such as cross-border investment efforts, negative externality, and power asymmetry, are hypothesized and characterized in the proposed model. This paper proposes a two-stage game-theoretic analytical model for normative and numerical analyses to address the above issue, where the decision dynamics of cross-governmental cooperation is investigated at the first stage, followed by the second stage conducted to elucidate its influence on sustainable value chain collaboration across the bilateral companies. The case of the Belt-and-Road initiative is illustrated as anecdotal evidence to demonstrate the validity and applicability of the proposed model using multi-data sources. Analytical results suggest that governmental decisions for cross-governmental bilateral cooperation are significantly related to the bilateral interaction parameters such as the input of investment efforts, and less likely to be affected by the power asymmetry in the long run. Furthermore, the cooperative cross-governmental policy intervention does favor the achievement of not only the bilateral social welfare enhancement (the government level) but also sustainable value chain collaboration (the firm level).
International sustainable value collaboration
Cross-border bilateral government cooperation