Environmental innovation and green total factor productivity: What role does government environmental attention play?

Abstract

Environmental innovation (EI) has become an essential driver of sustainable development, yet its influence on green total factor productivity (GTFP) remains underexplored. This study examines how EI affects GTFP and evaluates the moderating role of government environmental attention (GEA). Using a balanced panel of 282 cities in China from 2012 to 2023, we adopt fixed-effects (FE) models as the baseline and further implement two-stage least squares (2SLS), fixed effects with Driscoll–Kraay standard errors (DK-FE), and interactive fixed effects (IFE) models to ensure credible inference. The results show that EI significantly enhances GTFP, indicating that innovation helps reconcile ecological objectives with economic efficiency. However, higher levels of GEA attenuate this positive association, suggesting unintended constraints from excessive administrative focus. Extension analyses reveal that the promoting effect of EI on GTFP is significant in non-municipal cities but not in municipalities. Moreover, distinguishing between substantive and symbolic EI indicates that both types contribute to improving GTFP. These findings clarify the complex interplay between innovation and governance in shaping green productivity and offer actionable implications for more balanced environmental policy design in emerging economies.