Greening through economic complexity: New evidence from Chinese cities

Abstract

“The stronger get stronger, the weaker get weaker”? Does the process of urban economic complexity exhibit a preference for green? This research utilizes the reflection iteration method to measure the economic complexity of Chinese cities and examines the impact of economic complexity on urban green development and its underlying mechanisms. The results are as follows: (1) the enhancement of economic complexity promotes the green development of urban economies, with enduring effects; (2) the green impact of economic complexity exhibits an increasing marginal trend, meaning that the higher the urban complexity, the stronger the marginal effect; (3) mechanism analysis indicates that economic complexity, on one hand, optimizes the developmental path of urban industries by squeezing out pollution-intensive and resource-dependent industries; on the other hand, economic complexity contributes to strengthening the urban innovation ecosystem, such as enhancing levels of urban innovation, entrepreneurship, technological advancement, R&D collaboration, and knowledge spillover. Additionally, the impact of economic complexity on urban green development is moderated by external constraints such as energy efficiency, environmental regulations, and public supervision; (4) heterogeneity analysis reveals that the green impact effect of economic complexity varies with the level of talent accumulation, administrative hierarchy, geographical location and industrial layout. This study offers valuable insights for optimizing urban development path and promoting green transformations in urban areas.