IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v45y2024i4p2304-2320.html
   My bibliography  Save this article

Substantial innovation or strategic innovation: An evolutionary game analysis of companies' green technology innovation strategies under carbon emission trading market

Author

Listed:
  • Beiqing Cui
  • Weide Chun
  • Zhonghao Shui
  • Tianyi Lei
  • Zhihui Li

Abstract

Although both the carbon emission trading market (CETM) and government regulatory actions promote companies' green technology innovation (GTI), little research has considered whether such innovation is substantial. In this paper, we categorize companies' GTI strategies into substantial innovation and strategic innovation. Considering market powers, the heterogeneity of companies, and the mutual influence of governments and companies, we construct a tripartite evolutionary game model that involves large and small companies and the government and conduct a simulation utilizing data on China's CETM. Our findings reveal that carbon trading prices, innovation subsidies, and the government's verification mechanism are the main factors that affect companies' choices regarding substantial innovation. However, the current carbon trading prices in China are relatively low, and companies are still likely to choose strategic innovation. Moreover, we find that when the substantial innovation of large companies exerts a greater impact on the product revenues of small companies, small companies are more inclined to choose substantial innovation. Therefore, in an effort to induce companies to choose substantial innovation, the CETM should play the leading role in this situation, and the government should implement different innovation subsidies and improve the verification mechanism.

Suggested Citation

  • Beiqing Cui & Weide Chun & Zhonghao Shui & Tianyi Lei & Zhihui Li, 2024. "Substantial innovation or strategic innovation: An evolutionary game analysis of companies' green technology innovation strategies under carbon emission trading market," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 45(4), pages 2304-2320, June.
    • Handle: RePEc:wly:mgtdec:v:45:y:2024:i:4:p:2304-2320
    DOI: 10.1002/mde.4134
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/mde.4134
    Download Restriction: no
    File URL: https://libkey.io/10.1002/mde.4134?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
    ---><---

    References listed on IDEAS

    as
    1. Nesta, Lionel & Vona, Francesco & Nicolli, Francesco, 2014. "Environmental policies, competition and innovation in renewable energy," Journal of Environmental Economics and Management, Elsevier, vol. 67(3), pages 396-411.
    2. Friedman, Daniel, 1991. "Evolutionary Games in Economics," Econometrica, Econometric Society, vol. 59(3), pages 637-666, May.
    3. Zhang, Gupeng & Lv, Xiaofeng & Zhou, Jianghua, 2014. "Private value of patent right and patent infringement: An empirical study based on patent renewal data of China," China Economic Review, Elsevier, vol. 28(C), pages 37-54.
    4. Nesta, Lionel & Vona, Francesco & Nicolli, Francesco, 2014. "Environmental policies, competition and innovation in renewable energy," Journal of Environmental Economics and Management, Elsevier, vol. 67(3), pages 396-411.
    5. Noailly, Joëlle & Smeets, Roger, 2015. "Directing technical change from fossil-fuel to renewable energy innovation: An application using firm-level patent data," Journal of Environmental Economics and Management, Elsevier, vol. 72(C), pages 15-37.
    6. Tuomas Takalo & Tanja Tanayama, 2010. "Adverse selection and financing of innovation: is there a need for R&D subsidies?," The Journal of Technology Transfer, Springer, vol. 35(1), pages 16-41, February.
    7. Xintong Wu & Zhendong Li & Fangcheng Tang, 2022. "The Effect of Carbon Price Volatility on Firm Green Transitions: Evidence from Chinese Manufacturing Listed Firms," Energies, MDPI, vol. 15(20), pages 1-11, October.
    8. Zhao, Lili & Wen, Fenghua & Wang, Xiong, 2020. "Interaction among China carbon emission trading markets: Nonlinear Granger causality and time-varying effect," Energy Economics, Elsevier, vol. 91(C).
    9. Zhang, Wei & Li, Guoxiang & Guo, Fanyong, 2022. "Does carbon emissions trading promote green technology innovation in China?," Applied Energy, Elsevier, vol. 315(C).
    10. Zhang, Yue-Jun & Peng, Yu-Lu & Ma, Chao-Qun & Shen, Bo, 2017. "Can environmental innovation facilitate carbon emissions reduction? Evidence from China," Energy Policy, Elsevier, vol. 100(C), pages 18-28.
    11. Bronwyn H. Hall & Dietmar Harhoff, 2012. "Recent Research on the Economics of Patents," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 541-565, July.
    12. Weiming Liu & Yating Qiu & Lijiang Jia & Hang Zhou, 2022. "Carbon Emissions Trading and Green Technology Innovation—A Quasi-natural Experiment Based on a Carbon Trading Market Pilot," IJERPH, MDPI, vol. 19(24), pages 1-13, December.
    13. Xiaoqi Li & Dingfei Guo & Chao Feng, 2022. "The Carbon Emissions Trading Policy of China: Does It Really Promote the Enterprises’ Green Technology Innovations?," IJERPH, MDPI, vol. 19(21), pages 1-15, November.
    14. Xu, Xiaofeng & Wei, Zhifei & Ji, Qiang & Wang, Chenglong & Gao, Guowei, 2019. "Global renewable energy development: Influencing factors, trend predictions and countermeasures," Resources Policy, Elsevier, vol. 63(C), pages 1-1.
    15. Bai, Dongbei & Hu, Jin & Irfan, Muhammad & Hu, Mingjun, 2023. "Unleashing the impact of ecological civilization pilot policies on green technology innovation: Evidence from a novel SC-DID model," Energy Economics, Elsevier, vol. 125(C).
    16. Kneller, Richard & Manderson, Edward, 2012. "Environmental regulations and innovation activity in UK manufacturing industries," Resource and Energy Economics, Elsevier, vol. 34(2), pages 211-235.
    17. Rogge, Karoline S. & Schneider, Malte & Hoffmann, Volker H., 2011. "The innovation impact of the EU Emission Trading System -- Findings of company case studies in the German power sector," Ecological Economics, Elsevier, vol. 70(3), pages 513-523, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dongri Han & Yue Zhu & Yanxia Diao & Min Liu & Ziyi Shi, 2024. "The impact of new digital infrastructure construction on substantive green innovation," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 45(6), pages 4072-4083, September.

    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. Hu, Jiangfeng & Pan, Xinxin & Huang, Qinghua, 2020. "Quantity or quality? The impacts of environmental regulation on firms’ innovation–Quasi-natural experiment based on China's carbon emissions trading pilot," Technological Forecasting and Social Change, Elsevier, vol. 158(C).
    2. Zhang, Gupeng & Duan, Hongbo & Wang, Shouyang & Zhang, Qianlong, 2018. "Comparative technological advantages between China and developed areas in respect of energy production: Quantitative and qualitative measurements based on patents," Energy, Elsevier, vol. 162(C), pages 1223-1233.
    3. Lionel Nesta & Elena Verdolini & Francesco Vona, 2018. "Threshold policy effects and directed technical change in Energy Innovation," SciencePo Working papers Main hal-03475570, HAL.
    4. Lazkano, Itziar & Pham, Linh, 2016. "Do Fossil fuel Taxes Promote Innovation in Renewable Electricity Generation?," Discussion Paper Series in Economics 16/2016, Norwegian School of Economics, Department of Economics.
    5. He, Zhengxia & Cao, Changshuai & Kuai, Leyi & Zhou, Yanqing & Wang, Jianming, 2022. "Impact of policies on wind power innovation at different income levels: Regional differences in China based on dynamic panel estimation," Technology in Society, Elsevier, vol. 71(C).
    6. Rubashkina, Yana & Galeotti, Marzio & Verdolini, Elena, 2015. "Environmental regulation and competitiveness: Empirical evidence on the Porter Hypothesis from European manufacturing sectors," Energy Policy, Elsevier, vol. 83(C), pages 288-300.
    7. Lazkano, Itziar & Nøstbakken, Linda & Pelli, Martino, 2017. "From fossil fuels to renewables: The role of electricity storage," European Economic Review, Elsevier, vol. 99(C), pages 113-129.
    8. Elliott, Robert J.R. & Kuai, Wenjing & Maddison, David & Ozgen, Ceren, 2024. "Eco-innovation and (green) employment: A task-based approach to measuring the composition of work in firms," Journal of Environmental Economics and Management, Elsevier, vol. 127(C).
    9. Fernández, Ana María & Ferrándiz, Esther & Medina, Jennifer, 2022. "The diffusion of energy technologies. Evidence from renewable, fossil, and nuclear energy patents," Technological Forecasting and Social Change, Elsevier, vol. 178(C).
    10. Massimiliano Mazzanti & Giovanni Marin & Susanna Mancinelli & Francesco Nicolli, 2015. "Carbon dioxide reducing environmental innovations, sector upstream/downstream integration and policy: evidence from the EU," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 42(4), pages 709-735, November.
    11. Stefano Bianchini & Giacomo Damioli & Claudia Ghisetti, 2023. "The environmental effects of the “twin” green and digital transition in European regions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 84(4), pages 877-918, April.
    12. Massimiliano Mazzanti & Antonio Musolesi, 2020. "A Semiparametric Analysis of Green Inventions and Environmental Policies," SEEDS Working Papers 0920, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Jun 2020.
    13. Ghisetti, Claudia & Pontoni, Federico, 2015. "Investigating policy and R&D effects on environmental innovation: A meta-analysis," Ecological Economics, Elsevier, vol. 118(C), pages 57-66.
    14. Lionel Nesta & Elena Verdolini & Francesco Vona, 2018. "Threshold Policy Effects and Directed Technical Change in Energy Innovation," GREDEG Working Papers 2018-01, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
    15. David Popp, 2019. "Environmental Policy and Innovation: A Decade of Research," NBER Working Papers 25631, National Bureau of Economic Research, Inc.
    16. Nicolò Barbieri & Alberto Marzucchi & Ugo Rizzo, 2021. "Green technologies, complementarities, and policy," SEEDS Working Papers 1021, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Sep 2021.
    17. Jia, Xiao & Takeuchi, Kenji, 2024. "Induced innovation in power generation technologies: Evidence from the Tokyo–Saitama Emissions Trading System," Energy Economics, Elsevier, vol. 129(C).
    18. Decai Tang & Jiannan Li & Shaojian Qu & Valentina Boamah, 2023. "Tripartite Collaboration among Government, Digital Technology Platform, and Manufacturing Enterprises: Evolutionary Game Model," Sustainability, MDPI, vol. 15(10), pages 1-20, May.
    19. Xie, Peijun & Jamaani, Fouad, 2022. "Does green innovation, energy productivity and environmental taxes limit carbon emissions in developed economies: Implications for sustainable development," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 66-78.
    20. Massimiliano Mazzanti & Antonio Musolesi, 2020. "Modeling Green Knowledge Production and Environmental Policies with Semiparametric Panel Data Regression models," SEEDS Working Papers 1420, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Sep 2020.

    More about this item

    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:wly:mgtdec:v:45:y:2024:i:4:p:2304-2320. 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: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    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.