Environmental Innovation and Green Entrepreneurship in China: a Non-linear Perspective

The impact of green technology on green entrepreneurship has not been measured in past studies. Therefore, this study contributes to the literature by investigating the nonlinear relationship between environmental technology and green entrepreneurship. The study employs a sample from China, spanning the years 1995 to 2021. For econometric analysis, we have employed both symmetric and asymmetric ARDL frameworks. The linear model proposes that environmental technology promotes both short- and long-term green entrepreneurship. In a similar vein, the nonlinear model shows that a positive shock in environmental technology supports both short- and long-term green entrepreneurship. In contrast, a negative shock does not significantly impact green entrepreneurship in the short and long term. Moreover, long-term green entrepreneurship is bolstered by financial development and environmental policy stringency, while government spending and environmental policy stringency aid short-term green entrepreneurship. Since environmental entrepreneurship responds asymmetrically to environmental technology changes, policymakers should consider the effects of positive and negative changes in environmental technology separately on green entrepreneurship.