The impact of economic complexity on green technology innovation in China

Green technology innovation (GTI) plays a pivotal role in mitigating global climate change and advancing environmental sustainability. Economic complexity, which reveals the diversity and sophistication of economic structures, provides a novel analytical perspective for improving the GTI. This research explores the potential influence of economic complexity on GTI advancement. This study constructs a dual fixed effects model to empirically analyze the influence of economic complexity on GTI, using panel data from 288 Chinese cities over the period 2000-2016. The results show that economic complexity significantly promotes GTI. On average, a 1% increase in economic complexity leads to a 1.84% increase in GTI. In addition, the impact of economic complexity is heterogeneous, with cities in less developed regions and central-western areas deriving greater marginal benefits from economic complexity growth. Additionally, we find that economic complexity can promote GTI through knowledge spillover and industrial structure upgrading. Furthermore, we demonstrate that the increase in economic complexity drives the "quantity-and-quality improvement" of GTI. Finally, using data sourced from China's A-share listed companies, we provide micro-level evidence of the connection between economic complexity and the GTI.