Environmental decentralization, environmental regulation, and green technology innovation: evidence based on China

The reform of the environmental management system and policy optimization is key to promoting green technology innovation. However, empirical studies on environmental monitoring decentralization are limited. As a result, this paper analyzes the impacts of environmental decentralization and environmental regulation on green technology innovation using China’s 30 provincial administrative panel data ranging from 2008 to 2017. The study outcome denotes that environmental decentralization is not conducive to green technology innovation. Similar effects are also found for environmental administration decentralization, environmental supervision decentralization, and environmental monitoring decentralization. Secondly, there is a U-shaped relationship between environmental regulation and green technology innovation. With the strengthening of environmental administrative decentralization and environmental supervision decentralization, environmental regulation has a significant positive role in promoting green technology innovation. Furthermore, environmental decentralization reduces the inhibitory effect of environmental regulation on green technology innovation in the eastern and central regions. Environmental decentralization does not play a regulatory role in the impact of environmental regulation on green technology innovation in economically developed areas. Lastly, the impact of environmental regulation on green technology innovation shows significant threshold characteristics with the change in environmental decentralization, in which there is an optimal threshold interval for environmental decentralization. The study concluded with an important reference value for determining reasonable levels of environmental decentralization among different regions and improving relevant environmental regulation strategies.