Under the Goal of Sustainable Development, Do Regions with Higher Energy Intensity Generate More Green Innovation? Evidence from Chinese Cities

Abstract

Sustainable development is a global focal point. This study aims to analyze the relationship between energy intensity and green innovation using panel data from 285 Chinese cities spanning from 2003 to 2019. The novel element of this research is the first-time exploration of green innovation through the lens of local industry attributes. It explains the impact of energy intensity on the development of green innovation. By employing a two-way fixed-effect model, the regression analysis reveals that higher energy intensity in cities negatively influences green innovation. Robustness and mechanism tests indicate that in regions with higher energy intensity, governments issue more policies to encourage enterprises and research institutions to pursue green innovation. However, these regions have developed significant path dependence, and local enterprises are reluctant to increase green investment even when facing stringent regulations. Heterogeneity analysis proves that cities with higher levels of digitalization, R&D investment, urbanization, and per capita GDP exhibit an increase in green innovation. The research and findings of this study are of significant importance for policy and strategy formulation, allowing governments and enterprises to develop targeted economic strategies to improve energy efficiency and promote green innovation, thereby achieving sustainable development goals. Potential limitations include data quality, and some key information is difficult to obtain from public sources due to confidentiality, which may result in limitations and biases in the results.