Driving factors on corporate green investments behaviors: from the strategic intersection of governments regulation and public participation

¹ Institute of Climate Economy and Low-carbon Industry, School of Business, Nanjing University of Information Science and Technology, Nanjing 210044, P.R. China
² GERAD, HEC Montréal, Montréal H3T 2A7, Canada
³ Nanjing Xinda Institute of Safety and Emergency Management, Nanjing 210044, P.R. China

^* Corresponding author: ke.jiang@hec.ca

Received: 11 March 2024
Accepted: 11 September 2024

Abstract

As the global community confronts the challenges of climate change, businesses face increasing pressure to adopt sustainable practices. This study develops a tripartite game model to investigate the impact of green investments on corporate performance, considering the dynamic interplay between governments regulations and public participation in shaping strategic initiatives. First, the evolutionary stability strategy (ESS) is identified by solving replicator dynamic equations and performing stability analysis of equilibrium points. Next, the practicability and rationality of the evolutionary game model are assessed by analyzing ESSs under various corporate green investment scenarios. Finally, a case-based example is provided to validate the theoretical findings and support the following arguments: there are eight equilibrium points and four potential ESSs in the game model; the selection of each ESS is primarily determined by the trade-off between costs and revenues for each stakeholder; increased governmental regulatory costs prompt a strategic shift, incentivizing corporations to enhance green investments; while rising penalties drive a preference for green options; and corporations recognizing compensatory responsibilities are steered towards sustainable pathways.