The impact of the free trade zones construction on green technological innovation efficiency --evidence from 288 cities in Chinese

Abstract

We measure the green technology innovation efficiency of 288 cities in China from static and dynamic dimensions using the $\text{super}-\text{SBM}$ model and $\text{Malmquist}-\text{Luenberger}$ index, and employ "Difference in Difference" (DID) model to evaluate the impact of FTZs construction on green technology innovation efficiency using panel data from 288 prefecture-level cities from 2008 to 2020. The findings show: (1) The FTZs significantly improve green technology innovation efficiency. The decomposition indexes promote the green technology innovation efficiency more from the dynamic productivity dimension (GTFP) functioning on technological advancement. (2) The FTZs can boost the efficiency of green technology innovation through industrial agglomeration, digital economy, and government financial support; (3) The effect of FTZs on the efficiency of green technology innovation differs based on the size and location of the city. Green technology innovation will reach maximum potential when promoting FTZ policy in less developed central, western, and interior regions. This study addresses whether FTZ policies can genuinely support regional green innovation and policy insights to expand opening up and enhance high-quality economic growth.

Keywords: Difference in difference model; Free trade zone; Green technology innovation efficiency; Green total factor productivity.