Green product development and innovation play a crucial role in addressing environmental issues. Governments often promote innovation by motivating manufacturers to enhance their products' environmental qualities (i.e., greenness, energy efficiency, recyclability). This paper investigates the implications of cost subsidy and environmental regulation for manufacturers’ pricing and environmental quality decisions, and triple-bottom-line (3BL) performance. We develop theoretical models involving one social welfare-maximizing government and one or two manufacturers. In the monopoly model, environmental regulation can achieve the same level of social welfare and environmental performance as cost subsidy when consumers have low environmental awareness. In the competitive model, market scale asymmetry between manufacturers drives differences in product price and environmental quality. Specifically, the manufacturer with a larger market share is also the leader in environmental quality and profit. Furthermore, cost subsidy and environmental regulation have distinct effects on environmental quality competition. A higher subsidy rate widens the gap between environmental qualities, helping competing manufacturers better differentiate their products. Conversely, a stricter regulatory standard narrows the gap between environmental qualities, hindering product differentiation. Moreover, numerical analysis shows that the dominating policy in the competitive model depends on environmental and market characteristics. Finally, we check the robustness of the results by considering two extensions of our models and find that the main insights remain valid.

中文翻译：

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成本补贴还是环境监管？政府干预对环境质量和 3BL 绩效的影响

绿色产品开发和创新对于解决环境问题发挥着至关重要的作用。政府经常通过激励制造商提高其产品的环境质量（即绿色、能源效率、可回收性）来促进创新。本文研究了成本补贴和环境监管对制造商定价和环境质量决策以及三重底线 (3BL) 绩效的影响。我们开发了涉及一个社会福利最大化政府和一两个制造商的理论模型。在垄断模式下，当消费者环境意识较低时，环境规制可以达到与成本补贴同等水平的社会福利和环境绩效。在竞争模式下，制造商之间市场规模的不对称导致了产品价格和环境质量的差异。具体来说，市场份额较大的制造商也是环境质量和利润的领先者。此外，成本补贴和环境规制对环境质量竞争具有明显的影响。较高的补贴率会拉大环境质量之间的差距，帮助竞争制造商更好地区分其产品。相反，更严格的监管标准会缩小环境质量之间的差距，阻碍产品差异化。此外，数值分析表明，竞争模型中的主导政策取决于环境和市场特征。最后，我们通过考虑模型的两个扩展来检查结果的稳健性，并发现主要见解仍然有效。