IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v13y2021i9p4733-d541920.html
   My bibliography  Save this article

The Mechanism of Driving Green Growth and Decreasing Energy Security Risks by Innovation in China

Author

Listed:
  • Feng Wang

    (School of Economics and Finance, Xi’an Jiaotong University, Xi’an 710061, China)

  • Ruiqi Wang

    (School of Economics and Finance, Xi’an Jiaotong University, Xi’an 710061, China)

Abstract

The role of innovation for economic growth has been proved by studies. However, whether innovation can decrease environmental cost and energy security risks remains to be studied. To explore the theoretical mechanism of driving green economic growth by innovation, we constructed a four-sector endogenous growth model, including the final-goods sector, the intermediate-goods sector, the Research and Development (R&D) sector, and the energy sector. Then we measured the innovation-driven effect of green growth and calculated the green added value of 40 industries in China during 2005–2016. Based on the calculations, we used a threshold regression model to test the mechanism of driving green growth and decreasing energy security risks by innovation. The results showed that: (1) the innovation-driven effect on green growth increased from 0.2729 in 2005 to 0.3446 in 2016. (2) The proportion of green added value in the traditionally added value increased from 79.54% in 2005 to 92.25% in 2016. (3) Innovation had a threshold effect on green growth: the role of innovation in driving green growth weakened in the long term, but not in the short term (4) Innovation also had a threshold effect on energy security risk: after the innovation-driven effect crossed the threshold, innovation decreased energy security risk more significantly.

Suggested Citation

  • Feng Wang & Ruiqi Wang, 2021. "The Mechanism of Driving Green Growth and Decreasing Energy Security Risks by Innovation in China," Sustainability, MDPI, vol. 13(9), pages 1-34, April.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:9:p:4733-:d:541920
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/13/9/4733/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/13/9/4733/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Considine, Timothy J. & Larson, Donald F., 2006. "The environment as a factor of production," Journal of Environmental Economics and Management, Elsevier, vol. 52(3), pages 645-662, November.
    2. Daron Acemoglu & Philippe Aghion & Leonardo Bursztyn & David Hemous, 2012. "The Environment and Directed Technical Change," American Economic Review, American Economic Association, vol. 102(1), pages 131-166, February.
    3. World Commission on Environment and Development,, 1987. "Our Common Future," OUP Catalogue, Oxford University Press, number 9780192820808.
    4. Hansen, Bruce E., 1999. "Threshold effects in non-dynamic panels: Estimation, testing, and inference," Journal of Econometrics, Elsevier, vol. 93(2), pages 345-368, December.
    5. Patrick Fève & Alain Guay, 2010. "Identification of Technology Shocks in Structural Vars," Economic Journal, Royal Economic Society, vol. 120(549), pages 1284-1318, December.
    6. Du, Kerui & Cheng, Yuanyuan & Yao, Xin, 2021. "Environmental regulation, green technology innovation, and industrial structure upgrading: The road to the green transformation of Chinese cities," Energy Economics, Elsevier, vol. 98(C).
    7. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    8. Raymond W. Goldsmith, 1951. "A Perpetual Inventory of National Wealth," NBER Chapters, in: Studies in Income and Wealth, Volume 14, pages 5-73, National Bureau of Economic Research, Inc.
    9. Moon, Young-Seok & Sonn, Yang-Hoon, 1996. "Productive energy consumption and economic growth: An endogenous growth model and its empirical application," Resource and Energy Economics, Elsevier, vol. 18(2), pages 189-200, June.
    10. Sohag, Kazi & Taşkın, F. Dilvin & Malik, Muhammad Nasir, 2019. "Green economic growth, cleaner energy and militarization: Evidence from Turkey," Resources Policy, Elsevier, vol. 63(C), pages 1-1.
    11. Karatayev, Marat & Hall, Stephen, 2020. "Establishing and comparing energy security trends in resource-rich exporting nations (Russia and the Caspian Sea region)," Resources Policy, Elsevier, vol. 68(C).
    12. Tahvonen, Olli & Salo, Seppo, 2001. "Economic growth and transitions between renewable and nonrenewable energy resources," European Economic Review, Elsevier, vol. 45(8), pages 1379-1398, August.
    13. Xie, Hualin & Yu, Yanni & Wang, Wei & Liu, Yanchu, 2017. "The substitutability of non-fossil energy, potential carbon emission reduction and energy shadow prices in China," Energy Policy, Elsevier, vol. 107(C), pages 63-71.
    14. Zhiding Hu & Yuejing Ge, 2014. "The Geopolitical Energy Security Evaluation Method and a China Case Application Based on Politics of Scale," Sustainability, MDPI, vol. 6(9), pages 1-15, August.
    15. Zhang, Long & Yu, Jing & Sovacool, Benjamin K. & Ren, Jingzheng, 2017. "Measuring energy security performance within China: Toward an inter-provincial prospective," Energy, Elsevier, vol. 125(C), pages 825-836.
    16. Yuexiang Yang & Xiaoyu Zheng & Zhen Sun, 2020. "Coal Resource Security Assessment in China: A Study Using Entropy-Weight-Based TOPSIS and BP Neural Network," Sustainability, MDPI, vol. 12(6), pages 1-15, March.
    17. Zeng, Shihong & Jiang, Xue & Su, Bin & Nan, Xin, 2018. "China's SO2 shadow prices and environmental technical efficiency at the province level," International Review of Economics & Finance, Elsevier, vol. 57(C), pages 86-102.
    18. Yan, Zheming & Zou, Baoling & Du, Kerui & Li, Ke, 2020. "Do renewable energy technology innovations promote China's green productivity growth? Fresh evidence from partially linear functional-coefficient models," Energy Economics, Elsevier, vol. 90(C).
    19. Debin Fang & Shanshan Shi & Qian Yu, 2018. "Evaluation of Sustainable Energy Security and an Empirical Analysis of China," Sustainability, MDPI, vol. 10(5), pages 1-23, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xie, Ronghui & Teo, Thompson S.H., 2022. "Green technology innovation, environmental externality, and the cleaner upgrading of industrial structure in China — Considering the moderating effect of environmental regulation," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    2. Yanli Ji & Jie Xue & Kaiyang Zhong, 2022. "Does Environmental Regulation Promote Industrial Green Technology Progress? Empirical Evidence from China with a Heterogeneity Analysis," IJERPH, MDPI, vol. 19(1), pages 1-23, January.
    3. Lee, Chien-Chiang & Xing, Wenwu & Lee, Chi-Chuan, 2022. "The impact of energy security on income inequality: The key role of economic development," Energy, Elsevier, vol. 248(C).
    4. Patrick Grüning & Justina Banionienė & Lina Dagilienė & Michael Donadelli & Marcus Jüppner & Renatas Kizys & Kai Lessmann, 2021. "The Quadrilemma of a Small Open Circular Economy Through a Prism of the 9R Strategies," Bank of Lithuania Working Paper Series 96, Bank of Lithuania.
    5. Wei Jin & ZhongXiang Zhang, 2018. "Capital Accumulation, Green Paradox, and Stranded Assets: An Endogenous Growth Perspective," Working Papers 2018.33, Fondazione Eni Enrico Mattei.
    6. Cai, Hechang & Wang, Zilong & Zhang, Zhiwen & Xu, Liuyang, 2023. "Does environmental regulation promote technology transfer? Evidence from a partially linear functional-coefficient panel model," Economic Modelling, Elsevier, vol. 124(C).
    7. Ahmet Koseoglu & Ali Gokhan Yucel & Recep Ulucak, 2022. "Green innovation and ecological footprint relationship for a sustainable development: Evidence from top 20 green innovator countries," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(5), pages 976-988, October.
    8. Shihong Zeng & Gen Li & Shaomin Wu & Zhanfeng Dong, 2022. "The Impact of Green Technology Innovation on Carbon Emissions in the Context of Carbon Neutrality in China: Evidence from Spatial Spillover and Nonlinear Effect Analysis," IJERPH, MDPI, vol. 19(2), pages 1-25, January.
    9. Yan, Zheming & Sun, Zao & Shi, Rui & Zhao, Minjuan, 2023. "Smart city and green development: Empirical evidence from the perspective of green technological innovation," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    10. Yanhong Liu & Xinjian Huang & Weiliang Chen, 2019. "Threshold Effect of High-Tech Industrial Scale on Green Development—Evidence from Yangtze River Economic Belt," Sustainability, MDPI, vol. 11(5), pages 1-21, March.
    11. André, Francisco J. & Smulders, Sjak, 2014. "Fueling growth when oil peaks: Directed technological change and the limits to efficiency," European Economic Review, Elsevier, vol. 69(C), pages 18-39.
    12. Fabian Stöckl, 2020. "Is Substitutability the New Efficiency? Endogenous Investment in the Elasticity of Substitution between Clean and Dirty Energy," Discussion Papers of DIW Berlin 1886, DIW Berlin, German Institute for Economic Research.
    13. Shiyi Chen & Amelia U. Santos-Paulino, 2010. "Energy Consumption and Carbon Emission-Based Productivity Change and Industrialization in Post-Reform China," WIDER Working Paper Series wp-2010-078, World Institute for Development Economic Research (UNU-WIDER).
    14. Faraz Farhidi, 2023. "Impact of fossil fuel transition and population expansion on economic growth," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(3), pages 2571-2609, March.
    15. Jin, Wei, 2021. "Path dependence, self-fulfilling expectations, and carbon lock-in," Resource and Energy Economics, Elsevier, vol. 66(C).
    16. Jin, Wei & van der Ploeg, Frederick & Zhang, Lin, 2024. "How clean capital slows down disinvestment of carbon-intensive capital in the low-carbon transition," Journal of Economic Dynamics and Control, Elsevier, vol. 162(C).
    17. Hu, Hui & Qi, Shaozhou & Chen, Yuanzhi, 2023. "Using green technology for a better tomorrow: How enterprises and government utilize the carbon trading system and incentive policies," China Economic Review, Elsevier, vol. 78(C).
    18. Grimaud, Andre & Rouge, Luc, 2005. "Polluting non-renewable resources, innovation and growth: welfare and environmental policy," Resource and Energy Economics, Elsevier, vol. 27(2), pages 109-129, June.
    19. Ran, Qiying & Yang, Xiaodong & Yan, Hongchuan & Xu, Yang & Cao, Jianhong, 2023. "Natural resource consumption and industrial green transformation: Does the digital economy matter?," Resources Policy, Elsevier, vol. 81(C).
    20. Xing Zhao & Yifan Guo & Zhen Liu & Anteng Xiu, 2023. "Boosting green recovery: the impact of green fiscal policy on green total factor productivity," Economic Change and Restructuring, Springer, vol. 56(4), pages 2601-2619, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:13:y:2021:i:9:p:4733-:d:541920. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.