IDEAS home Printed from https://ideas.repec.org/a/spr/endesu/v25y2023i10d10.1007_s10668-022-02520-2.html
   My bibliography  Save this article

Green baton: how government interventions advance green technological innovation

Author

Listed:
  • Li Liu

    (Tianjin University)

  • Zhe Wang

    (Nanjing Audit University)

  • Jiangtao Xu

    (Tianjin University
    Hainan University)

  • Zaisheng Zhang

    (Tianjin University)

Abstract

How to formulate an effective intervention mechanism to stimulate green technological innovation (GTI) has become a key problem that plagues the government. Existing researches on GTI seldom consider consumer preference and market competition, and there is a lack of comparative research on GTI governance mechanisms among different governments. Therefore, considering consumer green technology preference and market competition, this paper proposes three different government intervention policies, i.e., no intervention (B), intervening firm (F) and intervening consumer (C), and develops a three-layer Stackelberg game model including the government, green and non-green firms and consumers to study the impact of three government interventions on GTI, product pricing and profits. Backward induction is used to solve optimal decisions. Then, to maximize social welfare, the optimal government intervention schemes under different conditions are discussed. Considering the impact of consumer behavior and product competition on GTI, this paper innovatively compares the optimal decision-making of manufacturers and the optimal government intervention scheme selection in different conditions from the perspective of maximizing social welfare. The results show that there is no optimal decision that is immutable. Market share of green products is positively correlated with the production cost adjustment coefficient. The intervention decision, GTI and green product pricing are negatively correlated with the green improvement coefficient and positively correlated with the environmental improvement coefficient. This research can be used to better guide the government how to design and select effective GTI incentive mechanism and guide manufacturers how to make the best response mechanism in the competitive environment.

Suggested Citation

  • Li Liu & Zhe Wang & Jiangtao Xu & Zaisheng Zhang, 2023. "Green baton: how government interventions advance green technological innovation," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(10), pages 11121-11152, October.
    • Handle: RePEc:spr:endesu:v:25:y:2023:i:10:d:10.1007_s10668-022-02520-2
    DOI: 10.1007/s10668-022-02520-2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10668-022-02520-2
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10668-022-02520-2?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 search for a different version of it.

    References listed on IDEAS

    as
    1. Ghosh, Debabrata & Shah, Janat, 2012. "A comparative analysis of greening policies across supply chain structures," International Journal of Production Economics, Elsevier, vol. 135(2), pages 568-583.
    2. Jonathan Chemama & Maxime C. Cohen & Ruben Lobel & Georgia Perakis, 2019. "Consumer Subsidies with a Strategic Supplier: Commitment vs. Flexibility," Management Science, INFORMS, vol. 65(2), pages 681-713, February.
    3. Xufeng(Rax) Yao & Ronald Askin, 2019. "Review of supply chain configuration and design decision-making for new product," International Journal of Production Research, Taylor & Francis Journals, vol. 57(7), pages 2226-2246, April.
    4. Klaus CONRAD, 2005. "Price Competition and Product Differentiation when Goods have Network Effects," Industrial Organization 0502002, University Library of Munich, Germany.
    5. Shao, Lulu & Yang, Jun & Zhang, Min, 2017. "Subsidy scheme or price discount scheme? Mass adoption of electric vehicles under different market structures," European Journal of Operational Research, Elsevier, vol. 262(3), pages 1181-1195.
    6. Zhang, Juan & Huang, Jian, 2021. "Vehicle product-line strategy under government subsidy programs for electric/hybrid vehicles," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 146(C).
    7. Bin Shen & Chen Zhu & Qingying Li & Xiaofeng Wang, 2021. "Green technology adoption in textiles and apparel supply chains with environmental taxes," International Journal of Production Research, Taylor & Francis Journals, vol. 59(14), pages 4157-4174, July.
    8. Wu, Peng & Jin, Ying & Shi, Yongjiang & Shyu, Hawfeng, 2017. "The impact of carbon emission costs on manufacturers' production and location decision," International Journal of Production Economics, Elsevier, vol. 193(C), pages 193-206.
    9. Yenipazarli, A. & Vakharia, A., 2015. "Pricing, market coverage and capacity: Can green and brown products co-exist?," European Journal of Operational Research, Elsevier, vol. 242(1), pages 304-315.
    10. Liu, Jiaguo & Zhao, Huida & Li, Jian & Yue, Xiaohang, 2021. "Operational strategy of customized bus considering customers’ variety seeking behavior and service level," International Journal of Production Economics, Elsevier, vol. 231(C).
    11. Maia David & Bernard Sinclair-Desgagné, 2010. "Pollution Abatement Subsidies and the Eco-Industry," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(2), pages 271-282, February.
    12. Maxime C. Cohen & Ruben Lobel & Georgia Perakis, 2016. "The Impact of Demand Uncertainty on Consumer Subsidies for Green Technology Adoption," Management Science, INFORMS, vol. 62(5), pages 1235-1258, May.
    13. Ghosh, Debabrata & Shah, Janat, 2015. "Supply chain analysis under green sensitive consumer demand and cost sharing contract," International Journal of Production Economics, Elsevier, vol. 164(C), pages 319-329.
    14. Lerner, Abba P, 1972. "Pollution Abatement Subsidies," American Economic Review, American Economic Association, vol. 62(5), pages 1009-1010, December.
    15. 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.
    16. Jung, Seung Hwan & Feng, Tianjun, 2020. "Government subsidies for green technology development under uncertainty," European Journal of Operational Research, Elsevier, vol. 286(2), pages 726-739.
    17. Sheu, Jiuh-Biing & Chen, Yenming J., 2012. "Impact of government financial intervention on competition among green supply chains," International Journal of Production Economics, Elsevier, vol. 138(1), pages 201-213.
    18. Jiayi Joey Yu & Christopher S. Tang & Musen Kingsley Li & Zuo‐Jun Max Shen, 2022. "Coordinating Installation of Electric Vehicle Charging Stations between Governments and Automakers," Production and Operations Management, Production and Operations Management Society, vol. 31(2), pages 681-696, February.
    19. Yang, Rui & Tang, Wansheng & Zhang, Jianxiong, 2021. "Technology improvement strategy for green products under competition: The role of government subsidy," European Journal of Operational Research, Elsevier, vol. 289(2), pages 553-568.
    20. Qi Zhang & Qiuhong Zhao & Xuan Zhao, 2019. "Manufacturer's product choice in the presence of environment-conscious consumers: brown product or green product," International Journal of Production Research, Taylor & Francis Journals, vol. 57(23), pages 7423-7438, December.
    21. Chen, Jen-Yi & Dimitrov, Stanko & Pun, Hubert, 2019. "The impact of government subsidy on supply Chains’ sustainability innovation," Omega, Elsevier, vol. 86(C), pages 42-58.
    22. Ouyang, Xiaoling & Li, Qiong & Du, Kerui, 2020. "How does environmental regulation promote technological innovations in the industrial sector? Evidence from Chinese provincial panel data," Energy Policy, Elsevier, vol. 139(C).
    23. Yu, Xinning & Lan, Yanfei & Zhao, Ruiqing, 2021. "Strategic green technology innovation in a two-stage alliance: Vertical collaboration or co-development?," Omega, Elsevier, vol. 98(C).
    24. Hafezalkotob, Ashkan, 2017. "Competition, cooperation, and coopetition of green supply chains under regulations on energy saving levels," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 97(C), pages 228-250.
    25. Resnier, Martin & Wang, Can & Du, Pengfei & Chen, Jining, 2007. "The promotion of sustainable development in China through the optimization of a tax/subsidy plan among HFC and power generation CDM projects," Energy Policy, Elsevier, vol. 35(9), pages 4529-4544, September.
    26. Bu, Maoliang & Qiao, Zhenzi & Liu, Beibei, 2020. "Voluntary environmental regulation and firm innovation in China," Economic Modelling, Elsevier, vol. 89(C), pages 10-18.
    27. Bigerna, Simona & Wen, Xingang & Hagspiel, Verena & Kort, Peter M., 2019. "Green electricity investments: Environmental target and the optimal subsidy," European Journal of Operational Research, Elsevier, vol. 279(2), pages 635-644.
    28. Liu, Dayong & Chen, Tong & Liu, Xiaoyang & Yu, Yongze, 2019. "Do more subsidies promote greater innovation? Evidence from the Chinese electronic manufacturing industry," Economic Modelling, Elsevier, vol. 80(C), pages 441-452.
    29. A. Mitchell Polinsky, 1979. "Notes on the Symmetry of Taxes and Subsidies in Pollution Control," Canadian Journal of Economics, Canadian Economics Association, vol. 12(1), pages 75-83, February.
    30. Kartick Dey & Sankhadip Roy & Subrata Saha, 2019. "The impact of strategic inventory and procurement strategies on green product design in a two-period supply chain," International Journal of Production Research, Taylor & Francis Journals, vol. 57(7), pages 1915-1948, April.
    31. Gemma Berenguer & Pinar Keskinocak & J. George Shanthikumar & Jayashankar M. Swaminathan & Luk Van Wassenhove & Gemma Berenguer & Qi Feng & Jeyaveerasingam George Shanthikumar & Lei Xu, 2017. "The Effects of Subsidies on Increasing Consumption through For-Profit and Not-For-Profit Newsvendors," Production and Operations Management, Production and Operations Management Society, vol. 26(6), pages 1191-1206, June.
    32. Chen, Zhisong & Su, Shong-Iee Ivan, 2014. "Photovoltaic supply chain coordination with strategic consumers in China," Renewable Energy, Elsevier, vol. 68(C), pages 236-244.
    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. Xu, Jingru & Yang, Baochen & Yuan, Chunlai, 2024. "Enhancing natural resource efficiency through digital government: Evidence from the utilization of energy, water, and land resources," Resources Policy, Elsevier, vol. 94(C).

    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. Jin, Wei & Yang, Jun & Wang, Chengfu, 2024. "Cost subsidy or environmental regulation? The effects of government interventions on environmental quality and 3BL performance," International Journal of Production Economics, Elsevier, vol. 270(C).
    2. Zolfagharinia, Hossein & Zangiabadi, Maryam & Hafezi, Maryam, 2023. "How much is enough? Government subsidies in supporting green product development," European Journal of Operational Research, Elsevier, vol. 309(3), pages 1316-1333.
    3. Zheng, Shiyuan & Jiang, Changmin & Fu, Xiaowen & Ge, Ying-En & Shu, Jia, 2022. "Subsidies for green technology adoption under uncertain demand and incomplete information," Omega, Elsevier, vol. 112(C).
    4. Zhang, Juan & Huang, Jian, 2021. "Vehicle product-line strategy under government subsidy programs for electric/hybrid vehicles," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 146(C).
    5. Ma, Shigui & He, Yong & Gu, Ran & Li, Shanshan, 2021. "Sustainable supply chain management considering technology investments and government intervention," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 149(C).
    6. Bian, Junsong & Zhang, Guoqing & Zhou, Guanghui, 2020. "Manufacturer vs. Consumer Subsidy with Green Technology Investment and Environmental Concern," European Journal of Operational Research, Elsevier, vol. 287(3), pages 832-843.
    7. Gan Wan & Gang Kou & Tie Li & Feng Xiao & Yang Chen, 2020. "Pricing Policies in a Retailer Stackelberg O2O Green Supply Chain," Sustainability, MDPI, vol. 12(8), pages 1-16, April.
    8. Liang Ma & Weiqiang Hu & Ru Liang, 2024. "The Impact of the Industrial Internet on the Innovation and Development Level of China’s Manufacturing Industry: Under the Perspective of Government Incentives," Sustainability, MDPI, vol. 16(10), pages 1-25, May.
    9. Du, Shaofu & Huang, Chong & Yan, Xia & Tang, Wenzhi, 2024. "Voluntary green technology adoption: The effects of regulatory uncertainty and competition," European Journal of Operational Research, Elsevier, vol. 315(2), pages 528-540.
    10. Sim, Jeongeun & Kim, Bowon, 2021. "Regulatory versus consumer pressure and retailer responsibility for upstream pollution in a supply chain," Omega, Elsevier, vol. 101(C).
    11. Junjian Wu & Jennifer Shang, 2021. "Optimal Green Operation and Information Leakage Decisions under Government Subsidy and Supply Uncertainty," Sustainability, MDPI, vol. 13(24), pages 1-19, December.
    12. Lingling Shi & Suresh P. Sethi & Metin Çakanyıldırım, 2022. "Promoting electric vehicles: Reducing charging inconvenience and price via station and consumer subsidies," Production and Operations Management, Production and Operations Management Society, vol. 31(12), pages 4333-4350, December.
    13. Ke Li & Gengxin Dai & Yanfei Xia & Zongyu Mu & Guitao Zhang & Yangyan Shi, 2022. "Green Technology Investment with Data-Driven Marketing and Government Subsidy in a Platform Supply Chain," Sustainability, MDPI, vol. 14(7), pages 1-22, March.
    14. Chen, Rui & Meng, Qiang & Yu, Jiayi Joey, 2023. "Optimal government incentives to improve the new technology adoption: Subsidizing infrastructure investment or usage?," Omega, Elsevier, vol. 114(C).
    15. Dou, Guowei & Choi, Tsan-Ming, 2024. "Compete or cooperate? Effects of channel relationships on government policies for sustainability," European Journal of Operational Research, Elsevier, vol. 313(2), pages 718-732.
    16. Li, Kunpeng & Wang, Lan, 2023. "Optimal electric vehicle subsidy and pricing decisions with consideration of EV anxiety and EV preference in green and non-green consumers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 170(C).
    17. Weimin Ma & Ranran Zhang & Shiwei Chai, 2019. "What Drives Green Innovation? A Game Theoretic Analysis of Government Subsidy and Cooperation Contract," Sustainability, MDPI, vol. 11(20), pages 1-24, October.
    18. Liu, Xiaoxi, 2024. "The introduction and market expansion effects of green products considering network externalities," Omega, Elsevier, vol. 124(C).
    19. Junsong Bian & Xiaolong Guo, 2022. "Policy analysis for emission-reduction with green technology investment in manufacturing," Annals of Operations Research, Springer, vol. 316(1), pages 5-32, September.
    20. Tang, Xiaoying & He, Yong & Salling, Melissza, 2021. "Optimal pricing and production strategies for two manufacturers with industrial symbiosis," International Journal of Production Economics, Elsevier, vol. 235(C).

    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:spr:endesu:v:25:y:2023:i:10:d:10.1007_s10668-022-02520-2. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.