Abstract: Enterprise green technology innovation (EGTI) is important for winning the battle of pollution prevention and control and promoting high-quality economic development in China’ new era. However, the externalities of green technology innovation often lead to the lack of intrinsic motivation of enterprises. This paper aims to explore the mechanism of how extrinsic incentives under government intervention could stimulate a synergistic effect between environmental regulation policy and green credit policy. For this purpose, a model of non-cooperative evolutionary game among the government, banks and enterprises is constructed to analyze how well government intervention could realize an evolutionary game equilibrium. Model simulations indicate that in order to ensure the effectiveness of policy synergy to promote EGTI, government intervention must take the motives and interests of both enterprises and banks into account. Specifically, the government should implement market-incentive environmental regulation policies that offer R&D subsidies in advance plus environmental tax reduction, and banks should implement green credit policies that allow early release of loans, conditional on strict post-loan management. A general finding is that there would be policy conflict between environmental regulation and green credit during the dynamic evolution process of promoting EGTI. However, the improvement of banks’ supervision efficiency and innovation performance of enterprise can mitigate and resolve the policy conflict. In this way, the policy goal of enhancing green technology innovation under the regulation and control of the government will be better achieved. This paper provides some policy suggestions on the government-led formation of an extrinsic incentive mechanism to promote EGTI.

Key words: government intervention, green technology innovation, green credit, environmental regulation, evolutionary game