Does Eco-innovation Improve Green Total Factor Productivity of China’s Industry?

The improvement of industrial green TFP is crucial for the sustainability of economy and environment. And the eco-innovation directly improves the industrial green TFP. However, there are few studies on the relation between eco-innovation and industrial green TFP. Based on the relevant data from 2006-2015 of 30 provinces in China, using SBM model this study firstly evaluates the industrial green TFP of each province by measuring the desirable output and undesirable output. Then the eco-innovation is measured by patent application quantity and further divided into breakthrough and incremental innovation by patent quality. The results show that eco-innovation improves the development of green industry in China. The promotion from breakthrough innovation is prominent. However, the incremental innovation restrains the development of green industry in China.