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Loaning scale and government subsidy for promoting green innovation

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  • Huang, Zhehao
  • Liao, Gaoke
  • Li, Zhenghui

Abstract

Green innovation has attracted worldwide attention in the past decades. In this paper, we develop series of game models to address the effects of green loans and government subsidies on green innovation activities of enterprises. We derive a threshold value for loaning interest rate. If the interest rate of the green loan is lower than this threshold value, then the enterprises are willing to accept the loan from the bank and implement green innovation. By defining a measure for environmental effect of productive activities, we obtain a threshold value for the loaning scale. If the loaning scale is larger than this threshold value, then it meets the purpose of green loan to improve the environmental quality. We prove the effectiveness of government subsidies as an intervention way in supporting green innovation and environmental protection.

Suggested Citation

  • Huang, Zhehao & Liao, Gaoke & Li, Zhenghui, 2019. "Loaning scale and government subsidy for promoting green innovation," Technological Forecasting and Social Change, Elsevier, vol. 144(C), pages 148-156.
    • Handle: RePEc:eee:tefoso:v:144:y:2019:i:c:p:148-156
    DOI: 10.1016/j.techfore.2019.04.023
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