The green transformation effect of foreign patent applications in China: evidence from Chinese manufacturing enterprises

The spillover of foreign patent technology in China and the consequent green transformation of manufacturing enterprises are pivotal factors for the country to achieve sustainable economic development. This study utilizes matched data from the patent database of the China National Intellectual Property Administration, database of Chinese industrial enterprises, and database of pollution emission of Chinese enterprises from 1998 to 2013 to investigate the impact and mechanism of foreign patent applications on the green transformation of manufacturing enterprises. Furthermore, this study constructs a spatial weight matrix of forward and backward industrial linkages to explore the spatial influence of foreign patent applications in China with regard to green transformation through inter-industry spillover effects. Research findings: first, as per the results of the mechanism analysis, foreign patent applications in China can drive the green transformation of manufacturing enterprises through the 'scale effect' and 'technology spillover effect'; moreover, its effect is influenced by the absorption capacity of enterprises and the strength of environmental regulation. Second, the results of heterogeneity analysis demonstrate that the green transformation effect of foreign patent applications in China is more significant in non-foreign-capital, heavy pollution, central and western, general trade and high market competition manufacturing enterprises. Third, foreign patent applications in China can promote the direct green transformation of this industry and the indirect green transformation of other industries through forward spillover and backward spillover of industrial linkage; the effect of backward spillover is more prominent. This study expands the research context and theoretical connotation of the green transformation of the manufacturing enterprises and provides inspiration and reference for the green transformation of manufacturing enterprises under the goal of 'peak carbon dioxide emissions' and 'carbon neutrality'.