Does fiscal expenditure promote green technological innovation in China? Evidence from Chinese cities

Abstract

The fiscal behavior of the governments can affect the green economy. Using the panel data of 276 cities from 2004 to 2019, this study examines the role of fiscal R&D expenditure and education expenditure in the process of urban green technological innovation in China. It is found that fiscal R&D and education expenditure can significantly promote green technological innovation, but the impact of fiscal expenditure in different periods and regions presents heterogeneity. More importantly, the urban economic growth pressure and fiscal pressure may affect the effect of fiscal expenditure, leading to the non-linear impact of fiscal expenditure on green technological innovation. With the increase of economic growth pressure and fiscal pressure, the positive effect of fiscal R&D expenditure on green technological innovation becomes weaker, while the promotional effect of education expenditure on green technological innovation does not change significantly. In addition, the green technological innovation effect of fiscal R&D and education expenditure can also indirectly reduce pollution emissions. In conclusion, optimizing the structure of fiscal expenditure is not only conducive to green technological innovation, but also improves environmental quality.