Local government behavior and green technology innovation under ecological goals incentives

Green technology innovation is perceived as an essential vehicle for reconciling problems between economic development and ecological preservation. As the largest developing country, China has introduced a series of policies to promote green technology innovation. However, existing research on the impact of ecological and environmental governance on green technology innovation is insufficient. To fill this gap, this study takes the perspective of local governments as executors of ecological and environmental governance and, based on China's urban panel data from 2008 to 2020, regards the ecological civilization pilot policy as a quasi-natural experiment and uses the difference-in-difference model to analyze the green technology innovation effect and its impact mechanism of cities under policy shocks. The study found that: (1) Ecological and environmental governance promotes green technology innovation in the pilot areas. (2) Ecological and environmental governance promotes green technology innovation through two mechanisms: "local government incentives" and "local government constraints". The incentive mechanism includes procurement incentives and fiscal incentives, while the constraint mechanism includes environmental administrative constraints, environmental target constraints, and environmental legal constraints. (3) The positive driving effect of ecological and environmental governance on green technology innovation varies depending on factors such as geographical location, resource endowment, local government competition and fiscal funds. Therefore, ecological and environmental governance should pay attention to local government's incentive and constraint behaviors, encourage local governments to take positive incentive measures, and reasonably control the intensity of constraint policies to promote green technology innovation continuously.