Does Environmental Innovation Improve Environmental Productivity?-An Empirical Study Based on the Spatial Panel Data Model of Chinese Urban Agglomerations

Environmental productivity comprehensively measures economic growth and environmental quality. Environmental innovation is considered to be the key to solving economic and environmental problems. Therefore, discussing the impact of environmental innovation on environmental productivity will reveal its economic and environmental effects. This paper measures environmental productivity by value added per unit of pollution emissions (four types of emissions are used) using panel data of 10 Chinese urban agglomerations from 2003 to 2016 to analyze the spatial correlation of environmental productivity, and constructs a spatial panel data model to empirically test the impact of environmental innovation on environmental productivity. It was found that environmental productivity measured by value added per unit of carbon dioxide emissions (gross domestic product (GDP)/CO₂) had a significant positive spatial spillover effect, and measured by value added per unit of sulfur dioxide emissions (GDP/SO₂), smoke (dust) emissions (GDP/SDE), and industrial sewage emissions (GDP/IS) had a significant negative spatial spillover effect. Environmental innovation has a significant negative inhibitory effect on environmental productivity measured by GDP/SDE and GDP/IS, but no obvious effect measured by GDP/CO₂ and GDP/SO₂. Control variables such as economic development level, industrial agglomeration, foreign direct investment, and endowment structure factor also show significant differences in environmental productivity measured by value added per unit of pollution emissions. In addition, there are significant differences in direct effects of explanatory variables on environmental productivity of local regions and indirect effects on neighboring regions. These differences are also related to the types of pollution emissions. Therefore, policymakers should set different policies for different types of pollution and encourage different types of environmental innovation, so as to achieve reduced pollution emissions and improved environmental productivity.