The Impact of Green Technology Innovation on High‐Quality Economic Development and Its Mechanisms: Evidence From China

ABSTRACT The imbalance between economic development and environmental protection has become a major challenge for regions seeking to achieve high quality economic development under China's new development philosophy. Can green technological innovation promote high quality economic development, and through what channels? How does fiscal decentralization shape this effect? To address these questions, this study uses panel data from 29 Chinese provinces, autonomous regions, and municipalities and employs two‐way fixed‐effects and mediation‐effect models to systematically examine the overall effect of green technological innovation on high quality economic development, the moderating role of fiscal decentralization, and the underlying transmission mechanisms. The results show that green technological innovation significantly promotes high quality regional economic development, whereas fiscal decentralization significantly weakens this positive effect. The main effect of green technological innovation remains robust across multiple robustness tests. The mechanism analysis indicates that green technological innovation enhances high quality economic development by promoting energy conservation and emissions reduction and industrial structure upgrading. Grouped estimates further show that this positive effect is more pronounced in regions with more developed green finance, greater physical capital investment, and higher population density. This study provides useful empirical support and policy implications for improving the green innovation support system, optimizing local government incentive and constraint mechanisms, and advancing high quality economic development.