How does China's Western Development Strategy affect regional green economic efficiency?

Narrowing regional economic gaps and constructing an environmentally friendly society are two major objectives of China's current economic policies. Promoting green development in resource-based regions is a global issue. Focusing on China's Western Development Strategy (WDS), this study first calculates the provincial green economic efficiency (GEE) in China. The synthetic control method is adopted to evaluate the net effect of WDS on regional GEE. The transmission mechanisms are then investigated in perspective of the interregional flow of innovation factors. The results show that: (1) The GEE in coastal areas of China is generally higher than that of western China; (2) The WDS can improve the overall regional GEE but the effect decays over time and through the diversity of the regions; (3) WDS can improve regional GEE by introducing innovation factors into the western regions, further improving the regional industrial structure, urbanization, and labor quality; (4) The optimal scale of innovation factors flowing into the WDS regions is calculated. The transmission mechanisms will have a positive effect on the GEE of the western regions simultaneously only if the inflow scale of the innovation factors varies on the interval (0.347, 0.618). The paper concludes with targeted policies to promote regional green development. How does China's Western Development Strategy Affect Regional Green Economic Efficiency? [Display omitted] •The provincial green economy efficiencies of China are calculated.•The effect of China’s Western Development Strategy (WDS) on regional green economy efficiency is estimated via Synthetic Control Method.•The transmission mechanisms that WDS affect regional green economy efficiency are investigated.•The optimal scale of innovation factors flowing into WDS’s regions is calculated via the Panel Smooth Transition Regression model.