The effect of economic growth pressure on green technology innovation: Do environmental regulation, government support, and financial development matter?

Green technology improvement is critical in promoting green development and mitigating negative externalities. Exploring the effect of economic growth pressure (EGP) on green technology innovation (GTI) is important for coordinated economic growth and green transformation. Using the data from 285 cities in China during 2006-2018, this study investigates the influence of EGP on GTI by taking the difference between economic growth target and previous year's actual growth rate to represent the EGP. The results indicate that EGP negatively affects GTI. When there is a 1% increase in EGP, green patent applications will fall by 3.2%. Furthermore, the heterogeneity analysis indicates that the negative effect of EGP is especially significant in western China compared with eastern and central regions. In addition, we find various nonlinear moderating effects between EGP and GTI by using panel threshold model. Specifically, EGP and GTI show an inverted U-shaped relationship with EGP increasing. Meanwhile, only when environmental regulation, government support, and financial development cross the thresholds will EGP have a significant role in promoting GTI. This study provides helpful implications for decision-makers to adopt a more reasonable combination of policy tools to achieve economic growth targets and low-carbon transformation.