Go for Economic Transformation and Development in China: Financial Development, Higher Education, and Green Technology Evolution

Technology innovation is the key driving force in achieving economic transformation and development. Financial development and the expansion of higher education can promote technological progress primarily by easing financing constraints and improving the level of human capital. This study examines the impact of financial development and higher education expansion on green technology innovation. It conducts an empirical analysis by constructing a linear panel model and a nonlinear threshold model. The present study sample is based on the urban panel data of China from 2003–2019. (1) Financial development can significantly promote the expansion of higher education. (2) The expansion of higher education can improve energy and environment-based technological progress. (3) Financial development can both directly and indirectly promote green technology evolution by expanding higher education. The joint financial development and higher education expansion can significantly empower green technology innovation. (4) In the process of promoting green technology innovation, financial development has a non-linear influence on it, with higher education as the threshold. The effect of financial development on green technology innovation varies according to the degree of higher education. Based on these findings, we put forward policy proposals for green technology innovation to promote economic transformation and development in China.