Technical Change and Green Productivity

When technologies could be “dirty” and “clean” in the context of green development, technical change does not necessarily mean (green) productivity growth. This paper studies the nonlinear impact of technical change on green productivity in China by applying a panel smooth transition regression approach with a panel data set of 284 prefecture-level cities from 2004 to 2015. Green productivity is measured by the meta-frontier Malmquist–Luenberger productivity growth (MML) index. Technical change is considered in three dimensions: indigenous technical change indicated by the stock of knowledge based on patents, technology transfers from foreign direct investment (FDI), and absorptive capacity. We find a non-linear relationship between technical change and green productivity contingent on specific economic situations and the city’s endowment of natural resources. In general, indigenous technical change shows an adverse effect on green productivity in China, which is much more prominent in the resource-dependent cities than in the non-resource-dependent cities. Technology transfers from FDI may either improve or hinder green productivity growth as economic situations change, while absorptive capacity has a small but positive effect. Also, these two effects are affected by the city’s endowment of natural resources. Accordingly, we discuss some policy implications.