How do green innovations promote regional green total factor productivity? Multidimensional analysis of heterogeneity, spatiality and nonlinearity

Green innovation (GI) can increasingly contribute to green total factor productivity (GTFP) in the process of high-quality development transformation. However, the heterogeneous, spatial, and non-linear characteristics of GI are usually ignored when investigating its impact on GTFP. Using panel data on 275 Chinese cities from 2004–2022, two-way fixed, spatial Durbin, threshold, and mediation effect models are adopted to comprehensively examine how GI affects GTFP. The benchmark regression shows that GI can promote GTFP, and this result is maintained after robustness tests. The invention innovation is more likely to increase GTFP than green utility and green design innovations; furthermore, the enhanced impact driven by GI is primarily manifested via technological progress. GI can promote GTFP in neighboring regions through spillover effects under various spatial weight matrixes. Using the technological gap as the threshold variable, GI can promote GTFP through a gradually increasing feature. Furthermore, industrial upgrading, pollution reduction, and factor agglomeration are the three main mechanisms through which GI promotes GTFP. Based on the perspective of GI promoting sustainable development, the findings of this paper provide valuable recommendations for formulating GI and sustainable development policies.