The Trilateral Game Analysis and Simulation Research of Government, Financial Institutions and Enterprises in the Development of Green Technology Innovation

Abstract

In 2020, the outbreak of COVID-19 pandemic caused great shock to domestic economy, left lots of enterprises in business difficulties. During the pandemic, people have come to realize that attention should also be given to ecological environment and public health in the pursuit of economic growth. Currently, faced by the urgent need of recovering economy, countries in the world are required to resolve the pressing problem of giving full play to government’s role in motivating financial institutions and enterprises, helping them restore production over time, and invigorating economy. One of the major steps that enterprises should take is to focus on the innovation of green technology, in order to go through the crisis and seek opportunities in economic shock. Exploring the driving force and incentive mechanism of enterprise’s green technology innovation is the key to clearing the way for its innovation. The thesis analyzes the dynamics of the trilateral game among government, financial institutions and enterprises in green technology innovation, in order to provide policy proposals for government in stimulating enterprise’s development and restoring economy in the context of COVID-19 pandemic. The trilateral evolutionary game model of government, financial institutions and enterprises and its dynamic replication equation were constructed under the premise of bounded rationality assumption. The Matlab software was used to numerically simulate the interaction process of the three parties, the effect of each parameter change on the result of system evolution was analyzed, and the factors affecting final evolution of the system to an ideal state were explored. The research results reveal that strengthening government subsidies for enterprises to adopt green technology innovation and taxation on traditional production, reducing the cost of early-stage green technology innovation of enterprises, and improving the expected benefits and indirect benefits of green technology innovation of enterprises and so on have a positive effect on the development of green technology innovation of enterprises. In addition, reducing the cost of green financial services of financial institutions and improving the direct and indirect benefits of green financial services can promote financial institutions to actively participate in the development of green technology innovation. Government plays a decisive role in promoting the development of green technology innovation. Therefore, it should also play a leading and regulating role in motivating enterprise from the following points. Government should improve its green incentive mechanism driven by the supply side, help financial institutions to provide better green innovation services driven by the demand side, and establish a well-performed system for enterprise’s green development based on interaction between supply and demand.