Do technological innovations promote urban green development?—A spatial econometric analysis of 105 cities in China

Highlights

• We examine the effects of technological innovations on urban eco-efficiency (UEE).

• Technological innovations enhance UEE in China.

• The effect of technological innovations on UEE varies by different regions in China.

• The effect of invention patents on UEE increases as a city's administrative level rises.

• The effects of national high-tech zones on UEE are more obvious in lower administrative level cities.

Abstract

Rapid urban economic growth in China has resulted in a number of resource and environmental challenges. Technological innovations are a source of economic growth but act as a double-edged sword in their effects on urban green development. This study aimed to determine whether technological innovations promote or impede the enhancement of urban eco-efficiency in China and also to reveal regional and administrative-level differences in terms of the effects of technological innovations. We selected the number of granted invention patents and the proportion of technology-related revenue in the total revenue of national high-technology industrial development zones (NHTIDZs) as indicators to represent knowledge innovation and product innovation, respectively, and used the spatial autoregressive model to examine the effects of the two innovations on urban eco-efficiency. The results showed that technological innovations, which enhanced urban eco-efficiency, had a greater impact on eastern cities than on central and western cities. The higher was the administrative level of a city, the greater were the effects of invention patents on urban eco-efficiency. Moreover, the higher was the administrative level of a city, the smaller was the role that NHTIDZs played in promoting urban eco-efficiency, which represented a case of diminishing marginal utility.

Introduction

Green economy is defined as an economy that results in improved human well-being, while significantly reducing environmental risks and ecological scarcities (UNEP, 2010). The development of a green economy is China's national strategy for the implementation of energy savings and emissions reductions, as well as for dealing with climate change. Although the urban economy is growing in China, Chinese cities face a series of resource and environmental challenges. The conflicts between economic development, energy consumption, and environmental pollution are becoming more severe. Seven of the ten most polluted cities in the world are in China (Zhang and Crooks, 2012). Of 338 cities at prefectural and higher level in China, only eight cities met air quality standards on a daily basis throughout 2016. Therefore, the 13th Five-Year Plan (2016–2020) promulgated by the Chinese government intends to continuously improve the quality of the urban environment. The construction of an ecologically sustainable civilization has become part of the national development strategy, and urban green development is essential. Eco-efficiency has been proposed as one of the main tools to measure the level of region and urban green development (Mickwitz et al., 2006). Obviously, prerequisites for achieving sustainable urban development include the calculation of urban eco-efficiency and the identification of its influencing factors.

Economists have widely recognized that technological innovations are a source of economic growth. Schumpeter (1934) first integrated technological innovations into economic analysis and pointed out that economic development is an evolutionary process with innovation as its core. Romer, 1990, Grossman and Helpman, 1991, and Aghion and Howitt (1992) regarded research and development (R&D) as a form of decision-making in enterprises and endogenized the effect of technological innovations on economic growth. Iyigun (2006) maintained that learning-by-doing and research activities trigger inventions and innovations and thus promote economic growth. With respect to empirical research, Ornaghi (2006) found that the diffusion of product innovation, rather than the innovation process itself, contributes more significantly to economic development. Some scholars have investigated the spatial spillover effect of technological innovations on regional economic growth (Eaton and Kortum, 1996, Moreno et al., 2005). However, with the emergence of resource and environmental challenges, the focus of research has gradually switched to how to achieve economic development in an ecologically friendly manner, and traditional technological innovations have been obliged to meet requirements for sustainability, i.e., technological innovations must consider the coordination of the economy, resources, and the environment. In terms of the effects of technological innovation on sustainable development, two opposite viewpoints can be seen from the existing literature. Technological innovations, in particular green technologies, have been regarded as promoting green development (Ghisetti and Quatraro, 2017) because they reduce pollutant emissions and production wastes (Blum-Kusterer and Hussain, 2001). By developing energy-efficient and environmentally friendly technologies, enterprises can lower energy consumption and limit the emission of environmental pollutants to enable the cleaner manufacture of products. In addition, resource recovery technologies help in the recycling and reuse of production wastes, which contributes to enhancements in resource efficiency. For rising economies, green technologies facilitate a leap from the high-pollutant stage of nascent development to the third stage of the environmental Kuznets curve (the low-pollutant stage of stable development, or the so-called sustainable development stage). In contrast, technological innovations are also deemed to be barriers to green development. Technological innovations have opportunity costs, and the low rate of technology transfer results in the benefits of innovation being less than its opportunity costs, which reduces the degree of intensification of economic growth. Moreover, technological innovations might cause a rebound effect and increase the energy consumption (Brannlund et al., 2007, Brookes, 1990) and pollutant emissions in product manufacture. To maximize profits, enterprises are usually blind to environmental considerations and pursue technological innovations on grounds of savings in labor and capital. This might result in resource wastage and the exacerbation of environmental pollution. For example, the widespread use of chemical fertilizers and pesticides in agriculture increases agricultural production but also leads to the deterioration of water quality and the eutrophication of lakes and rivers. In addition, many products are environmentally friendly in their operation and use stages, but their production may cause significant pollution. For example, the utilization of shale gas in power generation is one of the pathways in the transition to cleaner electricity in China (Chang et al., 2015), but the production of shale gas (in particular, hydraulic fracturing activities) involves the consumption of large volumes of water and environmental and geological threats (Chang et al., 2014).

Therefore, technological innovations do not necessarily have green attributes. They may promote or hinder urban eco-efficiency in accordance with multiple factors such as urban industrial structures and regulatory policies. The effects of technological innovations on green development are a combination of positive and negative effects. The existing literature often analyzes the effects of technological innovations on eco-efficiency at provincial and sectoral level (Zhang et al., 2017a), and urban studies are comparatively rare. In addition, spatial correlations exist between different cities, which tend to become stronger with the intensification of multilateral economic relations and the more frequent flow of materials and resources. Thus, an analysis of the effects of technological innovation on urban green development that considers spatial correlations is imperative. This study extends research at the provincial level to the urban level using panel data for 105 cities in China. We increased the sample size to yield more robust model results, and comprehensively considered economic, resources, and environment to calculate the urban eco-efficiency using the directional slacks-based model. Moreover, we constructed different spatial weights matrices that corresponded to geographical and economic factors and calculated the respective effects of knowledge innovation and product innovation on urban eco-efficiency using the spatial autoregressive model. The study also considered the heterogeneity of urban development, i.e., the regional and administrative-level differences in terms of the effects of technological innovations on urban green development. The study results provided useful policy references for governmental authorities to advance urban green development via the utilization of technological innovations.