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Can Green Finance Drive the Development of the Green Building Industry?—Based on the Evolutionary Game Theory

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  • Shaoliang Li

    (Hubei Key Laboratory of Construction and Management in Hydropower Engineering, China Three Gorges University, Yichang 443002, China
    College of Hydraulic & Environmental Engineering, China Three Gorges University, Yichang 443002, China)

  • Xiazhong Zheng

    (Hubei Key Laboratory of Construction and Management in Hydropower Engineering, China Three Gorges University, Yichang 443002, China
    College of Hydraulic & Environmental Engineering, China Three Gorges University, Yichang 443002, China)

  • Qin Zeng

    (Hubei Key Laboratory of Construction and Management in Hydropower Engineering, China Three Gorges University, Yichang 443002, China
    College of Hydraulic & Environmental Engineering, China Three Gorges University, Yichang 443002, China)

Abstract

The construction industry has a significant impact on the environment, and green buildings provide an effective means of reducing environmental impact. Green finance can facilitate industrial transformation and upgrading, reduce construction costs, attract investment, and promote green industry development. However, traditional financing models still dominate the financing of green building projects, even if they are not in line with the core principles of green building. To solve this problem, this paper establishes a three-party evolutionary game model, which, based on the assumption of finite rationality, considers three core stakeholders: bank and financial institutions, developers, and consumers. The conditions for evolutionary stable equilibrium are identified through an equilibrium analysis of the strategic behavior of each subject, followed by a replication dynamic analysis. Simulation analysis was used to study the effects of key parameters on cooperative behavior and evolution. The results of the study show that (1) The high initial willingness of bank and financial institutions and consumers has a significant driving effect on the market. (2) When the market willingness is high, the government can steer the market towards the desired goal at relatively low policy costs. (3) With the support of green finance, green buildings can still flourish even if the return is slightly lower than traditional building projects. The results of the study reveal cooperative behavior and its evolutionary patterns, which help stakeholders coordinate their goals and promote the development of the green building industry.

Suggested Citation

  • Shaoliang Li & Xiazhong Zheng & Qin Zeng, 2023. "Can Green Finance Drive the Development of the Green Building Industry?—Based on the Evolutionary Game Theory," Sustainability, MDPI, vol. 15(17), pages 1-17, August.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:17:p:13134-:d:1230218
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    References listed on IDEAS

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    2. Xiaokang Wang & Li Zhu & Yue Tang & Haoyu Deng & Haolong Wang, 2024. "Multiple Paths to Green Building Popularization Under the TOE Framework—A Qualitative Comparative Analysis of Fuzzy Sets Based on 26 Chinese Cities," Sustainability, MDPI, vol. 16(21), pages 1-21, October.
    3. Jingqing Hong & Isabelle Chan & Pei Ma, 2025. "Towards an Integrated Socio-Ecological Approach in Green Building Transitions: A Systematic Literature Review," Sustainability, MDPI, vol. 17(12), pages 1-34, June.
    4. Dong Zheng & Hejun Xu & Shoaib Ali & Zhifu Jia & Xiaojun Ma, 2024. "Quadripartite Evolutionary Game of Incentives for Green Retrofitting of Historical Buildings," Sustainability, MDPI, vol. 16(23), pages 1-27, December.
    5. Xianwei Ling & Hong Wang, 2024. "Green Behavior Strategies in the Green Credit Market: Analysis of the Impacts of Enterprises’ Greenwashing and Blockchain Technology," Sustainability, MDPI, vol. 16(11), pages 1-21, June.

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