Government Subsidy Policy Research Articles

Evolutionary game of inland waterways LNG construction under government subsidy and carbon tax policy under fuzzy environment

Abstract Since the pollution from inland waterways account for a great portion of urban pollutions, to use clean energy in inland waters has become an efficient means in combatting inland waterway pollution. With the increasing global demand for clean energy, liquefied natural gas (LNG) is increasingly favored by various countries, and its application in inland waterways transportation is becoming increasingly widespread. This paper focuses on the evolutionary game interaction mechanism between the government, energy company and shipping company as the main participants in inland waterways LNG construction, considering the costs as fuzzy variables. The impact of participating in LNG construction implementation on the evolutionary stable strategy (ESS) was discussed. The research result indicates the following: (1) If the government, energy company and shipping company all participate in inland waterways LNG construction, the conditions are that the profits of the government, energy company and shipping company that choose to participate in LNG construction exceed the costs of not participating. (2) The convergence rates of ESS of the government, energy company and shipping company are positively correlated with the initial values of each other’s choice strategies, negatively correlated with carbon tax, subsidy and the cost of implementing positive strategy. (3) The cooperation between the energy company and shipping company has no impact on the selection of government evolutionary game strategy. The premise for the energy company and shipping company to participate in LNG construction together is that both parties have excess returns. Therefore, to ensure the implement of LNG application in inland waterways, the government should carry out carbon tax and at the same time perform subsidy policy, with the common participation of the energy company and shipping company.

Correction: Stackelberg game analysis of government subsidy policy in green product market

Correction: Stackelberg game analysis of government subsidy policy in green product market

A study on the nonlinear relationship between market, subsidy, and income of photovoltaic enterprises based on chaos theory

With the annual promotion of the international “dual carbon” goals, countries attach great importance to the development and innovation of clean energy. The United States, Japan, and China have all created many policies for the research and market development of photovoltaic energy. This article incorporates market dynamic regulation capability into a two-dimensional system of government subsidy policies and photovoltaic revenue, constructs a three-dimensional dynamic nonlinear model based on market dynamic regulation capability, government subsidies, and enterprise revenue, and numerically simulates and analyzes the impact of parameter and initial value changes in the equation on enterprise revenue. The market dynamic regulation capability is obtained from Chaotic attractors and dynamic evolution graphs of the nonlinear evolution between government subsidies and corporate profits in different scenarios. Research has shown that: (1) Rapidly improving the dynamic regulation ability of the market cannot continuously increase the revenue of the photovoltaic industry; (2) The changes in market dynamics affect the dependence of enterprises on government subsidies; (3) The demand for government subsidies by enterprises gradually decreases with the increase of their own profits.

The impact of government subsidies on the persistence of firm innovation: evidence from China

ABSTRACT How the government subsidies will change the performance of firm’s innovative projects has long been debated. We attempt to narrow this gap from a dynamic perspective by employing Chinese A-share listed firms as a sample. Based on the novel innovation index, we studied the impact of government subsidies on the persistence of firm innovation. Findings show that total government subsidies promote the persistence of overall firm innovation. However, when we divided the total government subsidies into technological subsidies and non-technological subsidies, we found that technological subsidies cast an inhibitory effect on the persistence of self-sustaining firm innovation. In further analysis, we discover that ‘self-sustaining firm innovation investment replacement’ phenomenon can explain the crowding-out effect of technological subsidies on self-sustaining firm innovation persistence. Based on empirical evidence, we also observed that the substitution of private innovation investment by technological subsidies may result in management costs. These findings offer a theoretical foundation for further enhancing the effectiveness of government subsidy policies.

Sharing mode selection and optimal pricing for an electric vehicle manufacturer

This paper studies the sharing mode selection and optimal pricing for an electric vehicle manufacturer (EVM). We evaluate three sharing modes, i.e. Mode N, car sales business only, Mode S, car sales business and car-sharing service provided by a self-built sharing platform, and Mode T, car sales business and car-sharing service provided by a third-party sharing platform. Further, we consider two types of government subsidy policies: purchase and production subsidies. We find that for purchase subsidies, the EVM should select Mode S if the transaction cost per sharing service is low, and select Mode T otherwise; for production subsidies, the EVM should select Mode S. Regardless of the subsidy policy, the optimal sales prices of EVs under Mode N and Mode S are the same, but both are lower than that under Mode T. The optimal rental price of EVs under Mode S is lower than that under Mode T.

Sustainable strategies for green supply chain within the platform economy consider subsidies and marketing efforts.

As consumers' green awareness continues to grow, the level of a product's eco-friendliness and the quality of its marketing have become significant factors in shaping consumers' purchasing decisions. The power structures within the supply chain, as well as corresponding government subsidy policies, are also key elements influencing sustainable strategies for the green supply chain. In a green supply chain comprising one manufacturer and one e-commerce platform, two sales models exist within the online e-commerce platforms: reselling and agency selling. This paper establishes and analyzes three distinct Stackelberg game models, namely: manufacturer-led model without subsidy (bm), manufacturer-led model with subsidy (sm), and platform-led model with subsidy (sp). The results are shown as follows, with the rise of consumers' environmental awareness, more consumers opt for green products, inspiring the manufacturer to increase its optimal greenness and platform to enhance its optimal marketing efforts level. Notably, government subsidies provide a significant stimulus. An increase in the green technology cost coefficient leads to a decline in the manufacturer's profits across all three modes. Intriguingly, the manufacturer's profits are always highest in the sp mode. As the marketing efforts cost coefficient increases, the platform's profits decrease in the bm and sm modes. In contrast, in the sp mode, the platform's profits increase rather than a decrease. The choice of mode primarily depends on the platform's marketing efforts cost coefficient. When this coefficient exceeds a threshold, the platform chooses the sp mode. However, due to the relatively low marketing efficiency in this scenario, the manufacturer prefers the sm mode. For the government, the sp mode involves agency selling, serves as an effective mechanism to redistribute subsidies, thereby yielding the maximum social welfare benefits. Management insights are provided for the manufacturer and platform managers to make decisions about the degree of greenness and marketing efforts level, along with insights for governments to optimize subsidy policies.

Stackelberg game analysis of government subsidy policy in green product market

Stackelberg game analysis of government subsidy policy in green product market

Government subsidy policies for guarantee financing: Risk compensation vs. fee reduction

Small and medium-sized enterprises (SMEs) often rely on credit guarantee companies (guarantors) to obtain financing from banks. To encourage guarantors’ engagement and reduce SMEs’ guarantee costs, governments commonly implement two subsidy policies: risk compensation, which shares a fraction of guarantors’ losses, and fee reduction, which reimburses SMEs for a fraction of their guarantee fees. This paper formulates a game theoretical model to analyze the impact of these two policies on the decisions and profits of a capital-constrained SME firm and a profit-maximizing guarantor, and how a government should choose between the two policies. We find that under each policy, the total expected profit improvement of the firm and the guarantor is greater than the government expected expenditure incurred if and only if the firm's default probability is below a threshold. Comparing the two policies with a budget constraint, we find that if the government's objective is to maximize the firm's expected profit, risk compensation outperforms fee reduction. But if the objective is to maximize the total expected profit of the firm and the guarantor, which policy performs better depends on the firm's default probability. Moreover, if the government aims to maximize social welfare, risk compensation performs as well as or better than fee reduction. We also consider the case where the guarantor is publicly owned and not-for-profit; in this case, under each policy, the expected profit improvement of the firm is always lower than the government expected expenditure.

Research on government subsidy policy for firms’ R&D investment considering spillover effects: A Stackelberg game approach

This paper constructs a Stackelberg game model to explore the optimal government subsidy and firm R&D investment in noncooperative and cooperative R&D patterns, respectively. Results show that government subsidy is beneficial for improving firm R&D investment, which means government subsidy acts as a “Crowd-In Effect” rather than a “Crowd-Out Effect.” Meanwhile, the results demonstrate that the optimal subsidy provided according to firm-specific R&D patterns can accurately reach Pareto economic and social welfare improvement. In contrast, the effectiveness of an undifferentiated subsidy policy is minimal.

How to promote the adoption of intelligent spray technology in farmers’ cooperatives? ——Based on the perspective of evolutionary game

In order to accelerate the development of smart agriculture and realize the green transformation of agriculture, the coupling of prospect theory and evolutionary game theory is introduced. Construct a two-party evolutionary game model for the adoption of intelligent spray technology in farmers' cooperatives, analyze the evolution of farmers' cooperatives and government strategy selection and its influencing factors according to the replication dynamic equation, and conduct numerical simulation experiments through Matlab software. The results show that the adoption of intelligent spray technology by farmers' cooperatives and the government's choice of subsidies are the two optimal stable states of the evolutionary system. The government's subsidy policy can effectively stimulate farmers' cooperatives to adopt intelligent spray technology, but when the government subsidy coefficient is greater than or equal to 70%, the decision-making evolution of the government and farmers' cooperatives is unstable. The increase in farmers' awareness of pesticide hazards, the scale of operation of farmers' cooperatives, the price of high-quality agricultural products, and the sensitivity of farmers' cooperatives to profits and losses contribute to the promotion of intelligent spray technology, and the damage probability of intelligent spray technology has a restraining effect.

Multi-Agent Evolutionary Game Strategy for Ecotourism Development in National Parks: A Case Study of Wuyishan National Park

This paper proposes a multi-agent evolutionary game model that can be used to study sustainable ecotourism development in national parks, with a focus placed on coordinating the interests of multiple stakeholders. Based on the limited rationality hypothesis, this study explores the impact of strategic choice evolution and the change of key factors on the stability of the ecotourism development system in national parks. To achieve this, a tripartite evolutionary game model involving “local government–tourism enterprises–tourists” is constructed. The model is applied to Wuyishan National Park as a case study, incorporating actual data and conducting numerical simulation experiments using MATLAB software. The findings of the study are as follows: (1) The optimal stable strategy for the three game players (local government, tourism enterprises, and tourists) is determined to be one that works to “supervise, implement high-level services, and participate in ecotourism”, respectively. This strategy is influenced by factors such as government subsidies, government fines, economic benefits obtained by tourism enterprises at different service levels, and the utilities experienced by participating and non-participating tourists in national park ecotourism. (2) Government subsidy policies can promote the attainment of a stable state for tourism enterprises and tourists. However, excessive subsidies may hinder the fulfillment of local governments’ expectations. (3) The greater the economic benefits obtained by tourism enterprises through high-level services are, the more favorable it will be for tourism enterprises to reach a stable state. However, this may lead to a relatively slower response from the government. (4) The higher the utilities that tourists derive from high-level services in ecotourism are, the faster the game players will reach a stable state. (5) The higher the utilities associated with tourists spending time in other places are, the more challenging it becomes for the three game players to achieve a stable state. This situation may cause tourists to shift from the initial strategy of “participating in ecotourism” to “not participating in ecotourism”. Based on these findings, the paper provides countermeasures and suggestions for promoting the sustainable development of ecotourism in Wuyishan National Park. These recommendations aim to offer decision-making references for enhancing the development of ecotourism in national parks across the country.

Platform information sharing and selling contract strategies with blockchain adoption

The recent rapid development of blockchain technology has drawn considerable attention. To examine the impact of blockchain on platform supply chains, we construct a supply chain consisting of two suppliers and an e-commerce platform. Each supplier may use either a reselling or an agency selling contract; therefore, three scenarios are possible: pure agency selling, pure reselling, or hybrid contracts. Considering blockchain’s role in eliminating transaction costs and achieving demand information transparency, we apply a game theory model to study each player’s pricing strategy and profits when blockchain and selling contract strategies vary. We find that the platform’s optimal selling contract and blockchain strategies strongly depend on commission rates, competition intensity, and transaction costs. Suppliers are willing to join the blockchain to gain demand information and reduce transaction costs. With low transaction costs and high competition intensity, the platform may ally itself with the agency supplier and authorize him to join the blockchain to maximize profits, which may ruin social welfare. From a social welfare perspective, we find that a pure agency contract is optimal, whereas the optimal blockchain strategy varies. Specifically, blockchain adoption may not benefit social welfare even when its operations costs are negligible. We further explore a scenario in which two suppliers can choose their selling contracts to derive insights into suppliers’ contract choices and government subsidy policies. Moreover, we explore the impact of marginal production costs on the optimal strategy for platforms.

The Impact of Perceived Quality of Government Subsidies on Residents’ Travel Intention Post-COVID-19 in Wuhan, China

To stimulate tourism demand and promote internal circulation, government subsidy policies have been introduced in many places in recent years due to public health concerns. In this paper, we propose a mechanistic model of the impact of the perceived quality of government subsidies on the travel intentions of residents based on consumer perception. Data were collected from Wuhan, China for empirical analysis. The results of this study showed that the perceived quality of government subsidies influenced travel intentions through the perceived behavioral control of travel consumers. Government subsidies were more likely to promote perceived behavioral control among residents with higher public health concerns, and their willingness to travel was stronger. Predicted risks undermine the positive effect of the perceived quality of government subsidies on travel intentions. The analysis suggested that a precise implementation of subsidy policies can enhance the efficiency of effects. We are keen to help China’s tourism market sustain growth in the post-COVID-19 period.

Policy Analysis of Biomass Recycling Supply Chain Considering Carbon and Pollution Emission Reduction—Taking China’s Straw Subsidy Policy for Example

In recent years, global environmental problems such as air pollution and the greenhouse effect have become more and more serious. The utilization of biomass energy not only can promote low-carbon transformation to establish a competitive advantage through value creation under the goals of carbon peaking and carbon neutrality but is also an important force in solving environmental problems. Government subsidy policies play an important role in promoting the development of biomass energy utilization. Taking straw as an example, this paper constructs a straw recycling supply chain system dynamics model consisting of farmers, acquisition stations, power plants, and pyrolysis plants based on a real-world case. Two types of straw processing, namely power generation and pyrolysis, are considered in the model. This paper analyzes the economic and environmental impacts of three subsidy policies, namely the unified rate policy, the linear growth policy, and a two-step policy, by comparing the profit, carbon, and pollution emission reduction benefits of the supply chain under different subsidy scenarios. The result shows that, among the three subsidy policies, the unified rate policy shows the best-promoting effect. The research results and policy implications in this paper could be a reference for governments trying to formulate subsidy policies for developing biomass energy utilization.

Modeling of the subsidy policy in fresh produce wholesale markets under yield uncertainty

Agricultural subsidies are crucial for stabilizing supply and price in fresh produce wholesale markets. In particular, fresh produce suffers the risk of yield uncertainty in the upstream origin market, which may cause supply and price fluctuations in the downstream wholesale market. By developing a game-theoretical framework, this paper analyzes the effectiveness of the transaction fee subsidy in wholesale markets under yield uncertainty. Our result shows that the subsidy policy can increase supply and reduce prices but may aggravate price fluctuations by inducing a larger supply scale in the wholesale market. The numerical analysis indicates that the subsidy policy performs a low efficiency in improving consumer surplus but high efficiency in social welfare. It may also engender a net economic benefit to induce a win–win outcome on consumer welfare and market profitability. This research reveals the possibility of balancing social and economic benefits through government subsidy policies.

The evaluation of government subsidy policies on carbon emissions in the port collection and distribution network: a case study of Guangzhou Port

The collection and distribution network of ports is the main cause of carbon emissions. The carbon peak is a basic policy in China, and the subsidy policy is one of the common measures used by the government to incentivize carbon reduction. We analyzed the transportation methods and the flow direction of a port and proposed a carbon emission calculation method based on emission factors. Based on the transportation time and the cost, a generalized transportation utility function was constructed, and the logit model was used to analyze the impacts of subsidy policies on transportation, thus calculating the effects of the subsidies on carbon reduction. We used Guangzhou Port as a case study, and calculated the carbon reduction effects in six different subsidy policy scenarios and concluded that the absolute carbon reduction value was proportional to the subsidy intensity. In addition, we constructed a subsidy carbon reduction efficiency index and found that the Guangzhou Port collection and distribution network had higher subsidy carbon reduction efficiency in low-subsidy scenarios. Finally, a sensitivity analysis was conducted on the subsidy parameters, and scenario 8 was found to have the highest subsidy carbon reduction efficiency. This achievement can provide decision support for the carbon emission strategy of the port collection and distribution network.

The effect of digitalization transformation on greenwashing of Chinese listed companies: an analysis from the dual perspectives of resource-based view and legitimacy

Background: The goal of “peak carbon and carbon neutrality” has pointed out the direction for the digital transformation (DIT) of enterprises. Companies need to pay a price when they seek green development or fulfill environmental responsibility. Out of self-interest, enterprises may exaggerate their environmental performance (EP) and then greenwashing behavior appears. Whether DIT can curb greenwashing behavior is a topic worth discussing.Objective: This paper proposes a theoretical framework for the influence of DIT on greenwashing and further discusses how government subsidies, resource slack, and external pressure affect them. The data of China’s listed A - share companies are used to test this theoretical framework.Methods: In this paper, multiple linear regression method is used to test the theoretical mechanism, and Hausman test and instrumental variable method are used to test the correctness of the conclusions.Results: (1) DIT has an inhibitory effect on greenwashing. (2) Government subsidies, resource slack, and public pressure positively moderate the relationship. (3) The effect of DIT does inhibit symbolic behavior, but the impact on substantive behavior is not obvious. The moderating effects of various variables are also different.Discussion: It is suggested that the government take the lead in building more digital public participation platforms to improve the online monitoring and early warning ability of enterprises’ greenwashing behavior, tourge enterprises to configure more intelligent and digital cleaner production equipment and facilities, and to improve their environmental performance. Local governments are encouraged to seize the trend of enterprises’ digital green transformation, introduce more government subsidy policies for DIT, improve digital infrastructure and digital intellectual property protection, and escort enterprises’ green DIT. The government and the banks should cooperate to give more green preferential loans, tax relief, and other measures to enterprises undergoing green DIT.

More Government Subsidies, More Innovation of New Energy Firms? Evidence from China

This paper evaluates the causal relationship between government subsidy and the innovation performance of new energy firms through count models using 2007–2021 data from China’s listed new energy companies. By looking at the subsidy for listed new energy firms and the number of granted patents, we find government subsidy policies significantly boost firms’ innovation performance. We estimate that a tenfold increase in government subsidy would lead to an increase of 7.11 in the total number of granted patents for new energy firms. Furthermore, a heterogeneity analysis shows such an effect varies depending on the nature of property rights, subsidy scale, and region for new energy firms. To be specific, state-owned firms are more dependent on government subsidy, the effect on innovation is generally higher in the high-subsidy group than in the low-subsidy group while being higher in the low-subsidy group when it comes to low-tech design patents, and firms in the eastern region are most sensitive to government subsidy. This paper also assesses the role of R&D investment in how government subsidy policies boost firms’ innovation performance; that is, by increasing their R&D funding investment rather than R&D manpower investment. These findings illustrate that in developing countries, government subsidy is effective in boosting new energy firms’ innovation performance.

Green Bond Pricing and Optimization Based on Carbon Emission Trading and Subsidies: From the Perspective of Externalities

In this paper, we establish a model based on real options theory and fractional Brownian motion (FBM) with jumps to price green bonds, and thus alleviate the externalities of green bonds. We assume that the floating value of green bonds is linked to the carbon price. The carbon emission trading mechanism and government subsidy policy are introduced into this model, and the expression is derived from the stochastic differential utility framework based on the fast Fourier transform method. Based on the numerical analysis and the simulations, this paper analyzes when governments are facing financial and carbon emission constraints and how policymakers balance the allocation between carbon allowances and government subsidies to help green bonds reach the exogenous equilibrium price. Our results have implications in terms of optimizing the distribution of economic resources by the reasonable pricing of green bonds. It is in line with the current theme of global energy conservation and emission reduction, and also has certain guiding significance for the development of the carbon emission trading market.

Can government subsidy and marine carbon capture, utilization and storage technology improve the decision level of supply chain intellectual property pledge financing?

Although it is an innovative technology with great potential for emission reduction, there are some problems such as high financing risk and lack of market for related products in marine carbon capture, utilization and storage (CCUS) technology. Its evolution depends largely on the support of the government. Based on supply chain perspective, this article constructs a two-level supply chain composed of one manufacturer and only one retailer. The intellectual property pledge financing decisions for the supply chain marine CCUS technology in no financing model, without government subsidy model, and under government subsidy model are considered separately. Through numerical simulation, the effect of government subsidies and marine CCUS technology intellectual property pledge financing on the optimum making decision and earning of members in supply chain are emphatically analyzed. According to the research results, the intellectual property pledge financing and government subsidy policy of marine CCUS technology have different impacts on manufacturers with diverse own funds and their supply chains. For the subsidy decision, the government needs to combine the capital constraints of the supply chain and the product's marine CCUS level to formulate the optimal decision, so as to encourage as many companies as possible to develop products related to marine CCUS product. This paper not only provides reference for the intellectual property pledge financing decision of marine CCUS technology, but also provides practical guidance for the government to lay down subsidy policies for the application and growth of marine CCUS technology.