Evolutionary Game Analysis of Government Subsidy Mechanism and Enterprise Innovation Strategy—From the Perspective of Stock Price Crash Risk

This study developed an evolutionary game model to explore the effects of crash risk on possible game scenarios between government subsidy and innovation in high-tech enterprises. The findings demonstrate that in cases of low crash risk, a threshold exists for the impact of government subsidies on the innovation decisions of high-tech enterprises. Within this threshold, an increase in government subsidies promotes innovation in high-tech enterprises, while beyond this threshold, an increase in government subsidies inhibits high-tech enterprises’ innovation. When the crash risk is high, the only stable equilibrium strategy of the system is for the government to refrain from providing subsidies while the enterprise chooses not to pursue innovation. The combination of a stable stock market and an efficient government is vital for fostering innovation and facilitating high-quality development, with potential implications for corporate innovation strategies and government subsidy mechanisms.