Venture Capital and Social Responsibility Behavior: An Evolutionary Game-Based Approach

This study introduces a novel evolutionary game-based model to explore the dynamic interplay between venture capital (VC) institutions and their invested firms in adopting corporate social responsibility (CSR) practices, with a focus on the moderating role of government supervision. With CSR gaining prominence in VC-backed firm ecosystems, understanding these dynamics is critical. Verified through numerical simulations, the model examines system evolution under scenarios with and without government supervision. Key findings include the following: (1) VC-backed firms are more likely to adopt CSR practices when VCs prioritize long-term investment strategies, whereas short-term strategies centered on shareholder value hinder CSR efforts; (2) factors such as VC equity share, CSR costs, and benefits significantly influence CSR adoption; and (3) government incentives can promote CSR and accelerate convergence toward ideal outcomes, though with limited impact. This research advances the understanding of the VC-CSR relationship, offering theoretical insights and practical recommendations to foster responsible investment and business practices.