The impact of fiscal incentives and regulatory constraints on China’s Green bond rating evaluations: An evolutionary game analysis and empirical study

The emergence and growth of green bonds is primarily propelled by policy measures. The players in the green bond rating and evaluation market exhibit significant responsiveness and reliance on government stimuli and regulatory sanctions. This paper considers the four-party participants in the green bond rating evaluation supervision system as an interactive whole and develops a four-party evolutionary game model of ”double rating + double supervision” under incomplete information based on Peng Ke’s (2020) research on the rating supervision model. The model is used to analyze the impact of asymmetric fiscal incentives and regulatory constraints on the quality of green bond rating evaluation information and regulatory effectiveness. Empirical tests are conducted on green bond issuance data from 2016 to 2021 to examine the impact of incentive policies and regulatory constraints on the validity of green bond rating evaluation information. The research findings indicate that the quality of green bond rating evaluation information is influenced by the degree of regulatory penalties imposed by regulators and the Green Bond Committee, direct regulatory costs, and government financial incentives. The strategic sensitivity of green bond rating evaluation agencies to strict regulatory measures is greater than that of government financial incentives.