How Does Regional Innovation Capacity Affect the Green Growth Performance? Empirical Evidence from China

Behind the high development of technology, backward institution systems and imperfect incentive mechanisms are not conducive to the green transformation of the economic society in China. Meanwhile, the relative effectiveness of both technical and institution innovation in encouraging green growth has yet to be tested empirically in China. It is of great practical significance to assess the effect of regional innovation capacity (RIC) on the green growth performance. This paper firstly exploits a model to measure regional innovation capacity from the perspective of technological and institutional respect. The panel data of 30 provinces in China during 2008-2017 is then used to examine the coordination effect of technological and institutional instruments on green growth performance. The empirical results demonstrate the following: (i) regional innovation capacity significantly affects the green growth performance of 30 provinces in China, showing regional differences. The elasticity of RIC on the green total factor efficiency in the eastern region is larger at approximately 0.48, followed by central and western areas, at about 0.47 and 0.45, respectively; (ii) technological innovation is able to incentivize green growth performance for all regions in China, while the institutional innovation induces green growth in the eastern region only; (iii) the coordination of technical and institutional instruments has a significant effect on green growth performance, positive in the eastern region and negative in central region respectively.