How to Restrain Regulatory Capture and Promote Green Innovation in China. An Analysis Based on Evolutionary Game Theory

In response to severe environmental challenges, green innovation (GI) has been thoroughly considered by various governments. Although China has promulgated many environmental policies to promote environmental governance, regulatory capture and the lack of independent external supervisors lead to a challenging future. This study employs an evolutionary game method to explore how the policy burden and media affect decision-making between local governments and manufacturing enterprises. On this basis, the simulation method is used to examine critical factors that affect regulatory capture and GI. The results show that the policy burden is the main factor that causes regulatory capture. When the policy burden exceeds a certain threshold, it will cause regulatory capture and hinder GI. Moreover, media, as an external supervisor, can restrain regulatory capture and promote GI significantly. Specifically, when the capacity of media supervision is high enough, due to the positive role of the media, it will inhibit the negative effects of policy burdens. Finally, combined with the different development stages of China's green industry, the corresponding policy recommendations are given. These results extend the research of regulatory capture and provide a reference for governments to promote environmental governance in practice.