How does internet development promote urban green innovation efficiency? Evidence from China

Abstract

In recent years, the widespread application of the internet has become an important engine driving urban innovation and green transformation in China. Based on panel data from China's 285 prefecture-level cities from 2003 to 2018, this study used the super-epsilon-based measure (EBM)-undesirable model to evaluate urban green innovation efficiency (GIE). The dynamic spatial Durbin model (SDM), mediating effect model, threshold model, and difference in differences (DID) method were then used to investigate the spatial spillover effect, transmission mechanism, nonlinear relationship, and policy shock effect of internet development on urban GIE, respectively. Several key results were obtained. (1) Internet development can significantly promote urban GIE in China directly and indirectly by means of promoting producer services agglomeration, driving financial development, and reducing resource dependence. (2) There was a nonlinear relationship between internet development and urban GIE under different levels of producer services agglomeration, financial development and resource dependence. (3) Notably, when heterogeneity in geographical locations, infrastructure levels and innovation capabilities was considered, developed eastern regions and cities with better traditional infrastructure and higher innovation capacities enjoyed a more noticeable effect from internet development on GIE. (4) The “Broadband China” pilot policy evaluation, which was processed by the continuous DID method, further confirmed the promotional effect of internet development on urban GIE. These findings will help policy-makers better understand the relationship between internet development and urban GIE, thus the government should steadfastly continue to enhance information infrastructure, accelerate the deep integration of traditional industries with the internet, and formulate targeted policies under the regional differences, so as to promote urban technological innovation and green development in China.