ETIKONOMI
Vol. 25 No. 1 (2026)

Does Governance Quality Mediate the Relationship Between Green Innovation and Economic Performance in China?

Khan, Jawad (Unknown)
Ying, Lin (Unknown)
Shah, Kashif Raza (Unknown)
Hasan, Alweena (Unknown)



Article Info

Publish Date
19 May 2026

Abstract

Research Originality: This study advances macro-level evidence by testing governance quality as an explicit mediation channel through which green innovation is translated into income gains, rather than treating institutions only as control variables. Research Objectives: It examines the long-run effect of green technological innovation on GDP per capita and tests whether governance quality mediates this relationship after controlling for R&D expenditure, renewable energy, emissions, labor participation, and trade openness. Research Method: Annual data for 1996–2024 are analyzed using a harmonized cointegration-based mediation framework, with FMOLS, CCR, robust least squares, and additional HAC/DOLS robustness checks. Empirical Results: Green technological innovation and R&D expenditure show positive long-run associations with GDP per capita across the main estimators. Governance quality is positively related to GDP per capita and partially mediates the innovation-growth relationship. Renewable energy is generally supportive but less stable, while the carbon indicator reflects continued reliance on carbon-intensive production during the transition. Implications: The findings suggest that stronger regulatory quality, implementation capacity, and institutional coordination can increase the economic returns from green innovation and support more balanced, high-quality growth. JEL Classification: O31, O44, Q55, Q56, C22

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Journal Info

Abbrev

etikonomi

Publisher

Subject

Economics, Econometrics & Finance

Description

Etikonomi is a peer-reviewed journal on Economics, Business and Management by Faculty of Economic and Business State Islamic University (UIN) Syarif Hidayatullah Jakarta. FOCUS This journal focused on economics, business, and management studies and present developments through the publication of ...