Research On The Impact Of Local Government Financial Pressure On Green Innovation Capacity

The report to the 20 th National Congress of the Communist Party of China pointed out : " To build a beautiful China is to promote the green transformation of the development mode through technological innovation,unswerving in the path of ecological priority and green development,with green technology innovation and application as the focus,promote the all-round green transformation of economic and social development,and form a modernization pattern featuring harmonious development between man and nature." At present,our economic development is in the process of transforming to green innovation development,and local government is the main force of green innovation drive strategy.However,as the main body of regional governance,the mismatch between the financial power and expenditure responsibility of local governments has increased the financial pressure of local governments virtually.Meanwhile,the excessive pursuit of economic growth caused by the political promotion tournament of officials has further intensified the financial pressure of local governments.In the face of the above problems,local governments have had to allocate limited financial resources to areas that can quickly bring benefits,The supply of hard public goods such as transportation,while reducing investment in green innovation,a soft public product with strong spillovers,long investment cycles,and uncertain returns,has a negative impact on the development of green innovation in China.Therefore,trying to explore the impact of local government financial pressure on green innovation capacity has certain theoretical and practical significance.This article will conduct a research on the impact of local government financial pressure on green innovation capacity from two parts: theoretical analysis and empirical testing.Firstly,the theoretical level can be divided into three parts: The first part sorts out the existing research results on local government financial pressure,green innovation capacity,and the relationship between local government financial pressure and green innovation capacity,and then defines the concepts of local government financial pressure and green innovation capacity in detail,and expounds the basic theory of this article;The second part,through a descriptive analysis of the current situation of local government financial pressure and green innovation capacity measurement data,aims to explore the current situation of local government financial pressure and green innovation in China;The third part is the theoretical mechanism analysis of this paper.Under the support of relevant basic theories,it makes a detailed theoretical mechanism analysis of the relationship between local government financial pressure and green innovation ability.Secondly,an empirical study is carried out on the basis of theoretical analysis.The financial revenue and expenditure data and green innovation patent data of prefecture-level city government from 2007 to 2020 are collected by hand,and a fixed-effect model is constructed to verify the theoretical analysis in Part III.Alternative variables are used to verify the robustness of the conclusions,and the system GMM model and instrumental variable method are used to overcome the endogenous characteristics.Finally,the influence of local government financial pressure on green innovation ability is further investigated from the perspective of government competition.Finally,on the basis of empirical test,the research conclusion of this paper is drawn: Within the research range,the increasing financial pressure of local governments will inhibit the local green innovation ability.The results are robust after testing with alternative variables,and the results are consistent with the baseline regression results after overcoming endogeneity with the systematic GMM model and instrumental variable method.Government competition will aggravate the inhibition effect of financial pressure on green innovation ability.In view of this,this paper will put forward relevant suggestions,in order to promote the local government to pay attention to the development of green innovation and improve the green innovation ability to provide some reference.