Threshold Effect of Industry Heterogeneity on Green Innovation Efficiency: Evidence From China

Abstract

We scientifically evaluate the efficiency of green innovation in the industry, analyze its changes and development, and study the impact of industry heterogeneity on it. Which will help us grasp the efficiency of green innovation at the industry level, also provides a scientific basis for formulating relevant environmental regulations. Based on industry heterogeneity and green innovation efficiency, this first analyzes industry panel data from 2005 to 2014 in China for 35 industries. It then uses the entropy weight method to calculate the industry heterogeneity and green innovation efficiency of the industry in China. Then, environmental regulations are taken as threshold variables to empirically analyze the correlation between industry heterogeneity and green innovation efficiency. The study found a significant twofold threshold effect that links industry heterogeneity and green innovation efficiency, showing an “inverted N-type” result. Industry heterogeneity negatively impacts green innovation efficiency when the environmental regulation strength is at a higher interval rank and a lower level. However, industry heterogeneity negatively affects the intermediate level of green innovation efficiency.