The heterogeneous effects of different technological innovations on eco-efficiency: Evidence from 30 China’s provinces

Abstract

Eco-efficiency (EE) is an important indicator to reflect the level of sustainable economic growth. This article places contribution to the existing literature by examining the relationship between innovation and eco-efficiency by incorporating three different innovation indicators: invention patent, utility patent and design patent. The dataset covers a balanced panel of 30 China’s provinces over the period of 2003–2017. Super efficiency slack-based model (SSBM) and super efficiency epsilon-based model (SEBM) under meta-frontier is used to measure the eco-efficiency. While, Bootstrap Truncation Regression is employed to analyze the different impacts of innovations on eco-efficiency. Regarding efficiency, the results indicate that eco-efficiency in China is at a decreasing trend overall, and there exists a certain heterogeneity among different regions. The results of Bootstrap Truncation Regression show that the invention patent and design patent exert positive effects on China’s eco-efficiency while utility patent inhibits the improvement of efficiency score during the sample period. Moreover, the estimation validates the existence of EKC (Environmental Kuznets curve) theory for China based on the extended STIRPAT model. Inward foreign direct investment (IFDI) has both pollution halo effect and pollution haven effect in China, while the effect of outward foreign direct investment (OFDI) on eco-efficiency is different across different regions. A U-shaped relationship is found between environmental regulation and eco-efficiency. On the basis of results, government should formulate strict environmental regulation and impose targeted subsidies on green technological innovation to promote green economic growth.