Quantity or quality? Regional innovation policy and green technology innovation

Abstract

As a typical practice of regional innovation policy, national innovation demonstration zones (NIIDZ) plays an important role in empowering green technology innovation. Analyzing the internal logic between NIIDZ and green technology innovation is of great practical significance to enhance China's independent innovation capability and accelerate the ecological civilization construction. Based on the panel data of 280 cities from 2005 to 2020, we use the difference-in-difference model (DID) to evaluate the policy effect of NIIDZ on green technology innovation from the dual perspective of quality and quantity. The results show that NIIDZ effectively contributes to the quantity of green technology innovation (GTI) and the quality of green technology innovation (GTQ), especially GTI. The conclusion is still valid after robustness tests like PSM-DID and eliminating the pilot interference of innovative cities. The test of the intermediary mechanism shows that regional innovation policy can not only directly drive GTI and GTQ but also indirectly promote them through accelerating talent gather, driving industrial clusters, and increasing government financial support. Spatial heterogeneity analysis indicates that the effectiveness of regional innovation policy demonstrates a decreasing trend from east to west, and this positive effect is more significant in cities with a higher level of financial development. Our results provide important policy insights for the Chinese government to further stimulate the effectiveness of green innovation in the NIIDZ, accelerate the construction of an innovative country, and achieve high-quality green economic development.

Keywords: Difference-in-difference (DID); Green technology innovation; National independent innovation demonstration zone (NIIDZ); Quantity or quality.