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How does Chinese-style fiscal decentralization affect green technology innovation?
Ming Yi1, Yanyu Guan1, Ting Wu2,3
1School of Economics and Management, China University of Geosciences, Wuhan, 430074, China.
Chinese-style fiscal decentralization significantly promotes green technology innovation, fostering competition and positive spatial spillover effects. This highlights the importance of fiscal policies in driving sustainable development and green transformation.
Area of Science:
- Environmental Economics
- Innovation Studies
- Public Policy
Background:
- Green technology innovation is vital for achieving green transformation.
- The impact of fiscal decentralization on green innovation depends on intergovernmental competition.
- Understanding these dynamics is crucial for effective environmental policy in China.
Purpose of the Study:
- To empirically assess the impact of Chinese-style fiscal decentralization on green technology innovation.
- To investigate the spatial spillover effects of fiscal decentralization on green innovation.
- To analyze the roles of financial support, environmental regulation, FDI, R&D, knowledge, and industrial structure.
Main Methods:
- Spatial Durbin Model applied to panel data.
- Data from 30 Chinese provinces (2010-2020).
- Analysis of induced resource allocation effects.
Main Results:
- Green technology innovation exhibits significant spatial agglomeration.
- Fiscal decentralization positively influences local and surrounding green technology innovation.
- Financial support and environmental regulation show mixed effects; FDI, R&D, knowledge, and industrial structure have varying spatial impacts.
Conclusions:
- Chinese-style fiscal decentralization effectively promotes green technology innovation through competition and spatial spillovers.
- Local governments demonstrate green preferences, driving innovation.
- Recommendations include refining fiscal decentralization, implementing green performance evaluations, and coordinating innovation incentives.
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