Innovation and green total factor productivity in China: a linear and nonlinear investigation

The empirical conclusions regarding the influence of innovation on green total factor productivity (GTFP) are relatively mixed. Based on China’s provincial panel data from 1999 to 2015, this paper uses the number of patent applications to measure regional innovation capacity, and comprehensively examines the linear and nonlinear effects of innovation on GTFP. Our results show that innovation plays a leading role in promoting GTFP growth in China in general. However, two different types of patents, invention patents, and non-invention patents have heterogeneous impacts on China’s green growth under the difference of innovation level. Additionally, the relationship between innovation and China’s GTFP also differs significantly before and after 2009. A further nonlinear effect analysis based on a panel threshold model reveals that the impact of innovation on GTFP is higher with the rise of human capital, knowledge stock, and financial development. However, only the appropriate environmental regulation stringency is conducive to promoting the influence of innovation on China’s green growth. Overall, our findings contribute to a better understanding regarding the impact of innovation on GTFP in China.