How does haze pollution affect green technology innovation? A tale of the government economic and environmental target constraints

Abstract

Numerous studies have revealed that developing green technology innovation is extremely important for minimizing haze pollution. However, limited by serious endogenous problems, research rarely focuses on the effect of haze pollution on green technology innovation. Based on a two-stage sequential game model including both production and government departments, this paper mathematically deduced the effect of haze pollution on green technology innovation. Then China's central heating policy is considered a natural experiment in our study to verify whether haze pollution is the key factor affecting the development of green technology innovation. The result that haze pollution significantly inhibits green technology innovation is confirmed, and this negative impact is mainly concentrated on substantive green technology innovation. Robustness tests have been performed, and the conclusion is still valid. Moreover, we find that government behavior can significantly affect their relationship. Specifically, the government's economic growth target will increase the haze pollution's ability to block the development of green technology innovation. However, if the government has a clear environmental target, their negative relationship will weaken. Based on the findings, targeted policy insights are presented in this paper.

Keywords: Economic growth target; Environmental target; Green technology innovation; Haze pollution.