Coordination of interests in the government-led urban regeneration fund in China: an evolutionary game perspective

Purpose As an innovative cooperation mode, the government-led urban regeneration fund has stimulated the guiding role of financial resources in China’s urbanization process. However, the differences in roles and objectives have led to conflicts of interests and decision-making contradictions, which affect the efficiency and sustainability of the fund. This study aims to examine critical factors necessary for the interest coordination. Design/methodology/approach Considering the interest relationship between local governments and fund managers, an evolutionary game model is established to examine their strategy selection in the urban regeneration fund. Four scenarios of equilibriums and corresponding evolutionarily stable strategies are analyzed. A case study is further conducted to simulate and analyze the evolutionary process and critical parameters of interest coordination. Findings The results illustrate that local governments can effectively guide the fund managers by management measures. Significantly, it is unsustainable to constantly relying on the government external support like a blood transfusion in the long term. A market-oriented operational model should be established for interest coordination, including the full-process dynamic regulation, improved income distribution mechanism and performance appraisal. Originality/value A dynamic strategy selection model and a case simulation analysis framework are developed to explore interest relationships in the urban regeneration fund. It is a novel attempt to introduce the fund manager, a specific stakeholder in financing process, into urban regeneration. Under the background of existing stock construction, this paper serves as a reference for governments in urban regeneration financing decisions, fund structure design and sustainable development.