IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v151y2025ics0140988325007479.html

Unlocking synergy: The coevolution mechanism of enterprises' green innovation decisions under China's energy-saving regulations

Author

Listed:
  • Hu, Wen
  • Zhang, Xiaoxu
  • Lou, Jiehong

Abstract

Energy-saving regulations are commonly implemented in developing countries to reduce energy consumption and enhance efficiency. Yet, their effectiveness is often limited as regulated enterprises may prioritize output reductions over enhancements in energy efficiency due to the regulations' failure to incentivize green innovation. Prior research debates the direct impacts of such regulations on green innovation, with mixed findings, often overlooking the competitive dynamics between enterprises and indirect impacts on unregulated enterprises, which can bias results and harm overall energy conservation efforts. In this study, using China's two national energy-saving initiatives as prototypes, we introduce a two-player evolutionary game model to analyze both the direct and indirect impacts of these regulations. This model deconstructs competitive dynamics into production competition and green innovation competition, and identifies key conditions under which regulations can achieve dual goals, highlighting a strong convergence effect and an appropriate regulatory intensity that slightly below the threshold. Through heterogeneity and sensitivity analyses, our findings suggest that targeting enterprises with high energy efficiency, industries with significant market concentration, enhancing innovation intention before regulation, and amplifying the market benefits of green innovation effectively promote green innovation. Our framework offers insights for optimizing energy-saving regulations to unlock synergy between reducing energy consumption and enhancing energy efficiency, as well as fostering green innovation among both regulated and unregulated enterprises.

Suggested Citation

  • Hu, Wen & Zhang, Xiaoxu & Lou, Jiehong, 2025. "Unlocking synergy: The coevolution mechanism of enterprises' green innovation decisions under China's energy-saving regulations," Energy Economics, Elsevier, vol. 151(C).
    • Handle: RePEc:eee:eneeco:v:151:y:2025:i:c:s0140988325007479
    DOI: 10.1016/j.eneco.2025.108920
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988325007479
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2025.108920?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Su, Xiaoning & Liu, Pengfei & Mei, Yingdan & Chen, Jiaru, 2023. "The role of rural cooperatives in the development of rural household photovoltaics: An evolutionary game study," Energy Economics, Elsevier, vol. 126(C).
    2. Zou, Chen & Huang, Yongchun & Hu, Shiliang & Huang, Zhan, 2023. "Government participation in low-carbon technology transfer: An evolutionary game study," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    3. Paul Lanoie, 2008. "When And Why Does It Pay To Be Green?," CIRANO Papers 2008n-02a, CIRANO.
    4. Hongshan Ai & Yang Hu & Ke Li, 2021. "Impacts of environmental regulation on firm productivity: evidence from China’s Top 1000 Energy-Consuming Enterprises Program," Applied Economics, Taylor & Francis Journals, vol. 53(7), pages 830-844, February.
    5. Adam B. Jaffe & Karen Palmer, 1997. "Environmental Regulation And Innovation: A Panel Data Study," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 610-619, November.
    6. Sun, Huaping & Edziah, Bless Kofi & Sun, Chuanwang & Kporsu, Anthony Kwaku, 2019. "Institutional quality, green innovation and energy efficiency," Energy Policy, Elsevier, vol. 135(C).
    7. Yuxian Xiao & Haitao Yin & Jon J. Moon, 2023. "Coping with Externally Imposed Energy Constraints: Competitiveness and Operational Impact of China’s Top-1000 Energy-Consuming Enterprises Program," The Energy Journal, , vol. 44(2), pages 103-138, March.
    8. Jordana Marques Kneipp & Clandia Maffini Gomes & Roberto Schoproni Bichueti & Kamila Frizzo & Ana Paula Perlin, 2019. "Sustainable innovation practices and their relationship with the performance of industrial companies," Revista de Gestão, Emerald Group Publishing Limited, vol. 26(2), pages 94-111, April.
    9. Lanjouw, Jean Olson & Mody, Ashoka, 1996. "Innovation and the international diffusion of environmentally responsive technology," Research Policy, Elsevier, vol. 25(4), pages 549-571, June.
    10. Zhou, Wenwen & shi, Yu & Zhao, Tian & Cao, Ximeng & Li, Jialin, 2024. "Government regulation, horizontal coopetition, and low-carbon technology innovation: A tripartite evolutionary game analysis of government and homogeneous energy enterprises," Energy Policy, Elsevier, vol. 184(C).
    11. Friedman, Daniel, 1991. "Evolutionary Games in Economics," Econometrica, Econometric Society, vol. 59(3), pages 637-666, May.
    12. Qiaoyi Chen & Zhao Chen & Zhikuo Liu & Juan Carlos Suárez Serrato & Daniel Xu, 2021. "Regulating Conglomerates in China: Evidence from an Energy Conservation Program," NBER Working Papers 29066, National Bureau of Economic Research, Inc.
    13. Price, Lynn & Wang, Xuejun & Yun, Jiang, 2010. "The challenge of reducing energy consumption of the Top-1000 largest industrial enterprises in China," Energy Policy, Elsevier, vol. 38(11), pages 6485-6498, November.
    14. Wang, Jie & Liao, Xianchun & Yu, Yue, 2022. "The examination of resource tax reform facilitating firms’ green innovation in resource-related industry in China," Resources Policy, Elsevier, vol. 79(C).
    15. Brunnermeier, Smita B. & Cohen, Mark A., 2003. "Determinants of environmental innovation in US manufacturing industries," Journal of Environmental Economics and Management, Elsevier, vol. 45(2), pages 278-293, March.
    16. Ning, Jiajun & Xiong, Lixin, 2024. "Analysis of the dynamic evolution process of the digital transformation of renewable energy enterprises based on the cooperative and evolutionary game model," Energy, Elsevier, vol. 288(C).
    17. Mark A. Cohen & Adeline Tubb, 2018. "The Impact of Environmental Regulation on Firm and Country Competitiveness: A Meta-analysis of the Porter Hypothesis," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 5(2), pages 371-399.
    18. Zelong Yi & Man Yu & Ki Ling Cheung, 2022. "Impacts of Counterfeiting on a Global Supply Chain," Manufacturing & Service Operations Management, INFORMS, vol. 24(1), pages 159-178, January.
    19. Ke, Jing & Price, Lynn & Ohshita, Stephanie & Fridley, David & Khanna, Nina Zheng & Zhou, Nan & Levine, Mark, 2012. "China's industrial energy consumption trends and impacts of the Top-1000 Enterprises Energy-Saving Program and the Ten Key Energy-Saving Projects," Energy Policy, Elsevier, vol. 50(C), pages 562-569.
    20. Yi Shi & Yan Li, 2022. "An Evolutionary Game Analysis on Green Technological Innovation of New Energy Enterprises under the Heterogeneous Environmental Regulation Perspective," Sustainability, MDPI, vol. 14(10), pages 1-26, May.
    21. Xiao, Lei & Xu, Minghui & Zheng, Jun-Jun & Huang, Song, 2020. "Inducing manufacturer’s quality enhancement via retailer’s acquisition strategy," Omega, Elsevier, vol. 93(C).
    22. Yu-Shan Chen & Shyh-Bao Lai & Chao-Tung Wen, 2006. "The Influence of Green Innovation Performance on Corporate Advantage in Taiwan," Journal of Business Ethics, Springer, vol. 67(4), pages 331-339, September.
    23. Shi, Xunpeng & Tian, Binbin & Yang, Longjian & Yu, Jian & Zhou, Siyang, 2023. "How do regulatory environmental policies perform? A case study of China's Top-10,000 enterprises energy-saving program," Renewable and Sustainable Energy Reviews, Elsevier, vol. 187(C).
    24. Baoshan Ge & Dake Jiang & Yang Gao & Sang-Bing Tsai, 2016. "The Influence of Legitimacy on a Proactive Green Orientation and Green Performance: A Study Based on Transitional Economy Scenarios in China," Sustainability, MDPI, vol. 8(12), pages 1-20, December.
    25. Pan, Xiongfeng & Ai, Bowei & Li, Changyu & Pan, Xianyou & Yan, Yaobo, 2019. "Dynamic relationship among environmental regulation, technological innovation and energy efficiency based on large scale provincial panel data in China," Technological Forecasting and Social Change, Elsevier, vol. 144(C), pages 428-435.
    26. Song, Aifeng & Rasool, Zeeshan & Nazar, Raima & Anser, Muhammad Khalid, 2024. "Towards a greener future: How green technology innovation and energy efficiency are transforming sustainability," Energy, Elsevier, vol. 290(C).
    27. Wanli Zhang & Bin Zhu & Yongling Li & Dan Yan, 2024. "Revisiting the Porter hypothesis: a multi-country meta-analysis of the relationship between environmental regulation and green innovation," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 11(1), pages 1-15, December.
    28. Eghbali, Mohammad-Ali & Rasti-Barzoki, Morteza & Safarzadeh, Soroush, 2022. "A hybrid evolutionary game-theoretic and system dynamics approach for analysis of implementation strategies of green technological innovation under government intervention," Technology in Society, Elsevier, vol. 70(C).
    29. Paramati, Sudharshan Reddy & Shahzad, Umer & Doğan, Buhari, 2022. "The role of environmental technology for energy demand and energy efficiency: Evidence from OECD countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 153(C).
    30. Jennifer DeBoer & Rajat Panwar & Jorge Rivera, 2017. "Toward A Place‐Based Understanding of Business Sustainability: The Role of Green Competitors and Green Locales in Firms' Voluntary Environmental Engagement," Business Strategy and the Environment, Wiley Blackwell, vol. 26(7), pages 940-955, November.
    31. Yang, Weixin & Yang, Yunpeng & Chen, Hongmin, 2022. "How to stimulate Chinese energy companies to comply with emission regulations? Evidence from four-party evolutionary game analysis," Energy, Elsevier, vol. 258(C).
    32. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    33. Shao, Shuai & Xu, Le & Yang, Lili & Yu, Dianfan, 2024. "How do energy-saving policies improve environmental quality: Evidence from China’s Top 10,000 energy-consuming enterprises program," World Development, Elsevier, vol. 175(C).
    34. repec:aen:journl:ej44-2-yin is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Liu, Wei & Zhao, Zhihui & Wen, Zhao & Cheng, Shixiong, 2022. "Environmental regulation and OFDI: Evidence from Chinese listed firms," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 191-208.
    2. Husain, Shaiara & Sohag, Kazi & Wu, Yanrui, 2024. "Proven reserve oil and renewable energy nexus: Efficacy of policy stringency," Resources Policy, Elsevier, vol. 90(C).
    3. Hille, Erik & Althammer, Wilhelm & Diederich, Henning, 2020. "Environmental regulation and innovation in renewable energy technologies: Does the policy instrument matter?," Technological Forecasting and Social Change, Elsevier, vol. 153(C).
    4. Xingshuai Wang & Ehsan Elahi & Zainab Khalid & Mohammad Ilyas Abro, 2023. "Environmental Governance Goals of Local Governments and Technological Innovation of Enterprises under Green Performance Assessment," IJERPH, MDPI, vol. 20(3), pages 1-19, January.
    5. Mian Yang & Yining Yuan & Fuxia Yang & Dalia Patino-Echeverri, 2021. "Effects of environmental regulation on firm entry and exit and China’s industrial productivity: a new perspective on the Porter Hypothesis," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 23(4), pages 915-944, October.
    6. Ming Yi & Xiaomeng Fang & Le Wen & Fengtao Guang & Yao Zhang, 2019. "The Heterogeneous Effects of Different Environmental Policy Instruments on Green Technology Innovation," IJERPH, MDPI, vol. 16(23), pages 1-19, November.
    7. Serkan ÇINAR & Mine YILMAZER, 2021. "Determinants of Green Technologies in Developing Countries," Isletme ve Iktisat Calismalari Dergisi, Econjournals, vol. 9(2), pages 155-167.
    8. Yan, Zihan & Liao, Lewei, 2025. "Entrepreneurial miracles in the low-carbon transition: Causal inference from China's low carbon city pilot," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 1374-1390.
    9. Esfandiar Maasoumi & Almas Heshmati & Inhee Lee, 2021. "RETRACTED ARTICLE: Green innovations and patenting renewable energy technologies," Empirical Economics, Springer, vol. 60(1), pages 513-538, January.
    10. Huang, Xiaoqi & Liu, Wei & Zhang, Zhan & Zou, Xinyu & Li, Pujuan, 2023. "Quantity or quality: Environmental legislation and corporate green innovations," Ecological Economics, Elsevier, vol. 204(PB).
    11. David Popp, 2019. "Environmental policy and innovation: a decade of research," CESifo Working Paper Series 7544, CESifo.
    12. Durán-Romero, Gemma & López, Ana M. & Beliaeva, Tatiana & Ferasso, Marcos & Garonne, Christophe & Jones, Paul, 2020. "Bridging the gap between circular economy and climate change mitigation policies through eco-innovations and Quintuple Helix Model," Technological Forecasting and Social Change, Elsevier, vol. 160(C).
    13. Ren, Shenggang & Hu, Yucai & Zheng, Jingjing & Wang, Yangjie, 2020. "Emissions trading and firm innovation: Evidence from a natural experiment in China," Technological Forecasting and Social Change, Elsevier, vol. 155(C).
    14. Patricia Laurens & Christian Le Bas & Stéphane Lhuillery & Antoine Schoen, 2017. "The determinants of cleaner energy innovations of the world’s largest firms: the impact of firm learning and knowledge capital," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 26(4), pages 311-333, May.
    15. Shang, Hua & Jiang, Li & Kumar Mangla, Sachin & Pan, Xiongfeng & Song, Malin, 2024. "Examining the role of national governance capacity in building the global low-carbon agricultural supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 192(C).
    16. Peng Qi & Yu Shang & Fang Han, 2022. "The Effects of Environmental Regulation on Investment Efficiency—An Empirical Analysis of Manufacturing Firms in the Beijing–Tianjin–Hebei Region, China," Sustainability, MDPI, vol. 14(10), pages 1-18, May.
    17. Lu, Yunguo & Zhang, Lin, 2022. "National mitigation policy and the competitiveness of Chinese firms," Energy Economics, Elsevier, vol. 109(C).
    18. Barbieri, Nicolò, 2015. "Investigating the impacts of technological position and European environmental regulation on green automotive patent activity," Ecological Economics, Elsevier, vol. 117(C), pages 140-152.
    19. Takahiko Kiso, 2019. "Environmental Policy and Induced Technological Change: Evidence from Automobile Fuel Economy Regulations," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(2), pages 785-810, October.
    20. Costantini, Valeria & Crespi, Francesco, 2008. "Environmental regulation and the export dynamics of energy technologies," Ecological Economics, Elsevier, vol. 66(2-3), pages 447-460, June.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:151:y:2025:i:c:s0140988325007479. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.