Venture Capital and Social Responsibility Behavior: An Evolutionary Game‐Based Approach

This study introduces a novel evolutionary game‐based model to explore the dynamic interplay between venture capital (VC) institutions and their invested firms in adopting corporate social responsibility (CSR) practices, with a focus on the moderating role of government supervision. With CSR gaining prominence in VC‐backed firm ecosystems, understanding these dynamics is critical. Verified through numerical simulations, the model examines system evolution under scenarios with and without government supervision. Key findings include the following: (1) VC‐backed firms are more likely to adopt CSR practices when VCs prioritize long‐term investment strategies, whereas short‐term strategies centered on shareholder value hinder CSR efforts; (2) factors such as VC equity share, CSR costs, and benefits significantly influence CSR adoption; and (3) government incentives can promote CSR and accelerate convergence toward ideal outcomes, though with limited impact. This research advances the understanding of the VC‐CSR relationship, offering theoretical insights and practical recommendations to foster responsible investment and business practices.