How does environmental regulation promote green technology innovation in enterprises? A policy simulation approach with an evolutionary game

• Published in: Journal of environmental planning and management Vol. 68; no. 5; pp. 979 - 1008
• Main Authors: Zhang, Zhenhua, Shi, Ke, Gao, Yue, Feng, Yanchao
• Format: Journal Article
• Language: English
• Published: Abingdon Routledge 16.04.2025; Taylor & Francis Ltd
• Subjects: administrative management; business enterprises; China; Clean technology; Cooperation; Coordination; Effectiveness; environmental law; Environmental protection; Environmental regulations; Environmental tax; evolutionary game; Game theory; Games; green technology innovation; Hypothesis testing; incentive-based environmental regulation; income tax; Income taxes; Innovations; Intellectual property; issues and policy; Policies; policy simulation; Regulation; Simulation; Stabilization; sustainable technology; Tax collections; Taxation; Technology; China
• ISSN: 0964-0568; 1360-0559; 1360-0559
• DOI: 10.1080/09640568.2023.2276064

To vividly illustrate the dynamic interactions between government and enterprise in China, a non-cooperative evolutionary game is employed. Simulations are conducted to examine the effectiveness of environmental regulations in promoting green technology involving multiple policy instruments for yielding the ideal outcome. In particular, numerical simulations are introduced to explore the asymptotic stability of various evolutionary stabilization strategies. It is shown that appropriate coordination of these policy instruments can improve policy effectiveness. The effect of increasing environmental tax collection combined with the gradual innovation special subsidy policies is more effective than separate policies. Moreover, under the necessary supervision intensity, the ideal evolutionarily stable equilibrium of incentive environmental regulation tools to promote enterprise green technology innovation is easier to achieve. Furthermore, three extended scenarios using the Porter hypothesis are investigated regarding enterprise innovation performance, intellectual property protection, and income tax collection.