Does Human Capital Matter for China’s Green Growth?—Examination Based on Econometric Model and Machine Learning Methods

Abstract

To tackle the increasingly severe environmental challenges, including climate change, we should pay more attention to green growth (GG), a path to realize sustainability. Human capital (HC) has been considered a crucial driving factor for developing countries to move towards GG, but the impact and mechanisms for emerging economies to achieve GG need to be further discussed. To bridge this gap, this paper investigates the relation between HC and GG in theory and demonstration perspective. It constructs a systematic theoretical framework for their relationship. Then, it uses a data envelopment analysis (DEA) model based on the non-radial direction distance function (NDDF) to measure the GG performance of China’s 281 prefecture level cities from 2011 to 2019. Ultimately, it empirically tests the hypothesis by using econometric model and LightGBM machine learning (ML) algorithm. The empirical results indicate that: (1) There is a U-shaped relationship between China’s HC and GG. Green innovation and industrial upgrading are transmission channels in the process of HC affecting GG. (2) Given other factors affecting GG, HC and economic growth contribute equally to GG (17%), second only to city size (21%). (3) China’s HC’s impact on GG is regionally imbalanced and has city size heterogeneity.

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“…It demonstrates that EG is heavily dependent on both physical and economic capital, in accordance with both neo-classical growth theories and endogenous growth theory (Basu & Jamasb, 2020;H. Liu, Anwar, Razzaq, & Yang, 2022;X. Liu, Cao, & Fan, 2022).…”

“…Looking at the link between labour and GRG reveals that it is statistically significant and positive across all quantitative quantile (from 10 to 90). It demonstrates that EG is heavily dependent on both physical and economic capital, in accordance with both neo‐classical growth theories and endogenous growth theory (Basu & Jamasb, 2020; H. Liu, Anwar, Razzaq, & Yang, 2022; X. Liu, Cao, & Fan, 2022). Similar to this, labour is anticipated to have a favourable impact on green EG.…”

“…Liu, Anwar, Irmak, & Pelit, 2022; H. Liu, Anwar, Razzaq, & Yang, 2022; X. Liu, Cao, & Fan, 2022;Salem et al, 2021;Sun et al, 2022;J. Wen et al, 2021;Y.…”

“…There are several studies in the existing literature, which have used several environmental indicators such as CO 2 emissions and ecological footprint (e.g., Anwar & Malik, 2021; Anwar et al, 2023; Anwar, Chaudhary, et al, 2021; Anwar, Malik, & Ahmad, 2022; Anwar, Sharif, et al, 2021; Anwar, Siddique, et al, 2021; Anwar, Sinha, et al, 2022; Cai et al, 2022; Chien et al, 2021; Esmaeili et al, 2023; Farooq et al, 2021; Habiba et al, 2022; Jahanger et al, 2023; L. Liu, Anwar, Irmak, & Pelit, 2022; H. Liu, Anwar, Razzaq, & Yang, 2022; X. Liu, Cao, & Fan, 2022; Salem et al, 2021; Sun et al, 2022; J. Wen et al, 2021; Y. Wen et al, 2022). Whereas there are few studies that have used GRG as a measure of environmental quality.…”