Impact of green technology innovation on high-quality economic development: evidence from China

Abstract High-quality economic development (QUA) has become a central policy objective in emerging economies, yet achieving both sustained economic growth and environmental protection remains an unresolved challenge. Green technology innovation (INN) is increasingly viewed as a potential solution, but its effectiveness and and the institutional conditions that support it warrant systematic empirical examination. QUA remains a central goal of sustainable growth, yet balancing economic expansion with environmental protection remains a challenge. This study investigates the role of INN in advancing QUA, focusing on the moderating effects of environmental regulation (REG) and government intervention (GOV). Using panel data from 41 cities in the Yangtze River Delta of China (2010-2020), QUA is evaluated across five dimensions: innovation, coordination, openness, green, and shared development. Results from fixed-effects regression reveal that INN significantly enhances QUA, and this finding is robust to alternative specifications. REG strengthens the effect of INN, consistent with the Porter Hypothesis, whereas GOV weakens this relationship by crowding out private innovation and resource efficiency. Spatial econometric analysis further indicates that INN improves local upgrading but lacks significant spillover effects across neighbouring regions, reflecting barriers in technology diffusion and inter-regional cooperation. These results highlight the need for coordinated strategies that integrate innovation, effective regulation, and appropriately calibrated government involvement to foster sustainable and innovation-driven development. These findings advance the literature by showing how INN, under varying REG and GOV conditions, drives multidimensional QUA and offers actionable insights for policy design.