Security Regulation and Enterprise Innovation in Communication Industry

This paper conducted an evolutionary game model of the interaction between the governments and communication enterprises and analyzed the impact of the government’s communication security regulation on the innovation decision-making of communication enterprises. The results show that the behavior of the governments depends on the social benefits, rent-seeking benefits, and regulating costs in strict and de security regulations. The communication enterprises’ behavior depends on the benefits of innovation and the costs in R&D and rent-seeking. When government subsidies are relatively inadequate, the communication enterprises’ strategy under government security regulation swings from not-innovation finally to innovation. The policy implications of this study indicate that appropriate de security regulation by the government will help communication enterprises generate a good atmosphere for innovation, and the appropriate increase in subsidies will be more conducive to driving enterprise innovation.