What Kind of Relationship Between Government and Business Can Stimulate Regional Green Innovation Development?—Analysis Based on Mixed Methods

Xiaotian Ji, Xiaobao Peng and Sihan Hou ()
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Xiaotian Ji: School of Public Policy and Management, University of Chinese Academy of Sciences, Beijing 100049, China
Xiaobao Peng: School of Public Affairs, University of Science and Technology of China, Hefei 230009, China
Sihan Hou: School of Education, Shanghai Jiao Tong University, Shanghai 200240, China

Sustainability, 2025, vol. 17, issue 3, 1-23

Abstract: China’s economic development has had adverse effects on the environment. Nevertheless, the Chinese government is optimistic about its ability to achieve a harmonious balance between economic growth and environmental sustainability. To this end, the government promotes, guides, and supports green innovation through the provision of policies and the creation of a conducive environment. Enterprises play a vital role in implementing and advancing green innovation, making them essential to realizing green development through their innovative capabilities. The relationship between government and business acts as a bridge between these two entities, fostering a synergistic effect that is crucial for achieving this objective. This paper conducts a comprehensive analysis of the existing literature on government–business relationships and green innovation, both domestically and internationally. Utilizing data envelopment analysis, it accurately measures the green innovation efficiency of 292 prefectural-level cities in China. The paper then employs a combination of a qualitative comparative analysis and a requisite condition analysis to establish the causal link between government–business relationships and green innovation development. Our detailed analysis of the data has identified three modes of driving green innovation: ‘government service-oriented’, ‘policy support-oriented’, and ‘pro- and clean-oriented’. These modes correspond to the developmental trajectories of China’s first, second, and third–fourth–fifth-tier cities, respectively. This paper offers policy recommendations for the systematic reform and optimization of government–business relationships in China. These recommendations are grounded in the three dimensions of the government–business relationship and consider the current conditions of cities at various stages of economic development. The findings and recommendations presented in this paper can serve as valuable insights for policymakers and businesses alike, providing guidance for future initiatives aimed at fostering a more sustainable economy.

Keywords: government–business relationship; green innovation; DEA; QCA (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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