Does fiscal decentralization support green economy development? Evidence from China

China, as the world’s largest energy consumer, has made the green economy a central component of its economic development strategy. However, how to effectively play the government’s crucial role in promoting the development of the green economy has become the focus of research by a significant number of economic experts. This paper uses the Super-SBM model to measure the green economy development index by introducing carbon dioxide emissions and industrial “three wastes” emissions and analyzes the relationship between fiscal decentralization, green technology innovation, and the green economy from the vantage point of local government behavior. It is discovered that fiscal decentralization significantly inhibits the development of the green economy, and local green technology innovation activities in the last period will amplify this negative impact. The above findings pass the robustness test. After introducing comparative analysis of economic growth indicators that are measured by the stochastic frontier analysis (SFA), the results show that only in the eastern region does fiscal decentralization both drive economic growth and do not inhibit green economy development by local government officials’ political promotion motives and self-interested preferred expenditures, but overall economic promotion and green economy inhibition caused by fiscal decentralization exist simultaneously in the Yangtze River Economic Belt region, and significant heterogeneity differences exist in the rest of the regions. The findings suggest that regulating local government fiscal behavior and improving fiscal transparency are very important to promote the development of China’s green economy.


Introduction
Despite driving economic growth, China's long-standing reliance on traditional fuels has significantly reduced environmental quality, such as global warming and resource depletion . In December 2021, the Central Economic Work Conference made it clear that we should correctly understand and grasp carbon peaking and carbon neutrality based on China's basic coal-based national conditions, pay close attention to green low-carbon technology research and development, and create conditions to achieve "double control" of energy consumption and "double control" of intensity as soon as possible.
Therefore, the transition to a green economy dilemma has become the focus of academic and professional discourse. Existing literature explores the linkage and transmission mechanism between environmental regulations and the green economy, arguing that different types and intensities of environmental regulations can facilitate the "increase in quantity and quality" of the green economy. Thus, numerous scholars have taken environmental regulations and green economy as the basis of their research and analyzed the role of various factors such as technological innovation (Zhao et al. 2019;Wang et al. 2022), industrial structure upgrading, foreign direct investment (Zheng et al. 2022a, b, c;Zhou and Zhao 2022), and R&D investment . However, environmental regulation, as a hard initiative of local governments to cope with environmental pollution, makes it difficult to comprehensively dissect the motives of local governments for governance. For a long time, China's industryled structure and factor-input-driven crude production methods have originated from local government behavior under the "Chinese style of decentralization" (Jalil et al. 2014;Hao et al. 2021). The strong incentives of the local government "promotion tournament" system have distorted the objectives of incentivizing officials and the rational design of government functions and created serious administrative and regional agency conflicts, which are the root problems of the current economic transformation in China (Li et al. 2019). The impact of this conflict on the green economy, fiscal decentralization, and the green economy, is, therefore, one of the primary research questions of this paper.
The empirical literature suggests that fiscal decentralization has a significant impact on the green economy, but empirical tests conclude that the findings are quite different. Qi et al. (2022) used the projection pursuit model and the entropy method to calculate the industrial green transformation and Chinese fiscal decentralization and found that fiscal decentralization is conducive to China's industrial green transformation, but its spatial spillover effect is negative, and, in the western region, fiscal decentralization has significantly hindered the green transformation of industries; Wang et al. (2021a, b) study data from 1994-2019 for a sample of 31 developed countries, pointing out that fiscal decentralization, is conducive to breaking the "resource curse" and promoting stable economic development. In the context of a Chinese-style fiscal decentralization system and a "promotion index race" model for officials, You et al. (2019) similarly find that fiscal decentralization is conducive to breaking the "resource curse" and promoting stable economic development and also find that environmental policies have a significant inhibitory effect on corporate eco-innovation, ecoinvestment, and eco-planning innovation under the Chinese model of fiscal decentralization and official promotion target races. In summary, it can be seen that administrative agency conflicts generated by local governments due to fiscal decentralization can have an impact on the green economy through various channels such as environmental policies, internal bias in fiscal spending, and local protection.
In addition, little literature has considered that local governments may use "regional green innovation" as a pretext to pursue their own interests based on the "GDP-only" performance appraisal mechanism, thereby exacerbating environmental pollution (Cheng et al. 2021;Lingyan et al. 2022). In fact, because lower-level governments are constrained by higher-level governments in both macroeconomic policy making and resource endowment allocation, local governments will react strategically to higher-level governments' fiscal decentralization policies in anticipation of setting growth targets, which, in turn, will influence their behavioral proactivity (Li et al. 2019). In recent years, the Chinese government has increased its spending on green technology projects, but it remains unclear whether local governments are motivated to use this to achieve "political goals." Moreover, due to the vast size of China, the uneven resource endowment, the implementation of regional policies, and the level of economic development and industrial structure of each region, there may be heterogeneous differences in such motives among different local governments under the fiscal decentralization system, and the reasons for this need to be further discussed in greater detail.
In conclusion, this paper's contributions are as follows: firstly, in contrast to the existing literature, which has conducted research through the perspectives of energy saving and environmental protection expenditure (Tang et al. 2022a, b;Fan et al. 2022), environmental regulation , and industrial agglomeration (Tang et al. 2022a, b), this paper incorporates the behavior of regional green technology innovation activities into the analytical framework to investigate whether local governments have self-interest tendencies; secondly, unlike most of the literature, which only constructs green economy indicators based on industrial "three waste" emissions (Chaaben et al. 2022), this paper introduces carbon dioxide emission indicators into the measurement of green economy indicators and employs them to examine the relationship between local government fiscal decentralization and green economy development. On this basis, the heterogeneous differences among the eastern, central, and western regions of China, as well as the policy-supported Yangtze River Economic Belt, are investigated through theoretical analysis and empirical tests, and the impact of such geographical heterogeneity on regional economic growth is discussed further.

Literature review and hypothesis formulation
Since its reform and opening up, China has maintained high economic growth for decades, which has been hailed as a "growth miracle" despite its low level of natural resource endowment, physical and human capital, and technological innovation capacity compared to developed countries. It is worth noting that local governments in China have played a very important role in seeking all possible ways to achieve regional economic growth. In addition, local government incompetence, inefficiency, and corruption are significant contributors to regional economic decline and impede economic development. A study of the existing literature shows that studies assessing the contribution to economic growth through fiscal reforms are sweeping, and, in general, fiscal decentralization can contribute to economic growth through the reduction of poverty (Song et al. 2022), income disparity (Diem and Hart 2022), the allocation efficiency of resources (Grisorio and Prota 2015), fixed asset investment, foreign direct investment (Wang and Ma 2014), among other mechanisms.
China is undergoing a transformation of the dynamics of economic development and industrial structure, and its focus has shifted from rapid development to quality development. It is also undergoing a crucial transition to an eco-friendly and resource-saving green economy. Under the international pressure of climate change and the increasingly severe natural endowment constraints, the realization of a green economy transformation faces unequal benefits and costs in the short term when local governments are motivated to make trade-offs between maximizing social benefits and maximizing their own interests. The purpose of this paper is to examine the impact of fiscal decentralization on the development of the green economy from the perspective of local government behavior, with the goal of recommending ways for the country to promote the reform of its government fiscal system and successfully achieve economic transformation.
As a result of China's vast territory, resource endowments and potential comparative advantages vary greatly between regions, and the central government frequently has difficulty formulating strategies that fully meet the comparative advantages of each region within the constraints of information asymmetry and other constraints, resulting in a "one-size-fits-all" situation. Local governments tend to develop appropriate strategies based on their potential comparative advantages and gradually improve environmental quality as development strategies become more compatible with local conditions as the degree of financial autonomy rises (Chen et al. 2022;Zhang et al. 2022). Based on the perspective of new environmental structural economics, the production structure is endogenously determined by the factor endowment structure of matching various environmental structures when local governments support industries and enterprises with comparative advantages by giving full play to their information advantages so as to achieve the optimal environmental conditions that are most suitable for development (Han and Kung 2015). In other words, as the financial autonomy of local governments increases, so will the development of the local green economy.
Although fiscal incentives and regional interests are important drivers of local government behavior, for government officials in the administrative pyramid, the "unwarranted opportunities" of official promotion are more realistic and important than achieving local fiscal revenue goals. Under the fiscal decentralization system, promotion tournaments cannot be fully open, fair, and impartial, which may lead to the decoupling of official promotion from political performance goals and even the existence of "buying and selling" of officials by related households. Some local officials even lose the motivation of promotion in order to maintain the mutual benefit status with local stakeholders and seek personal benefits. If local governments are not constrained and supervised, they will compete to relax environmental protection standards under the stimulation of economic incentives and political promotions, which is not conducive to environmental pollution control but will lead to vicious competition among local governments and a "race to the bottom" (Cheng et al. 2021;Xin and Qian 2022). Under fiscal decentralization, market segmentation due to differences in local resource endowments and protectionism for local dominant industries, even though it can improve energy efficiency, prevents factor resources from flowing adequately between resource-poor and abundant regions, which, in turn, contributes to the failure of market supply and demand signals and affects the efficiency of market resource allocation (Guerrero et al. 2022) and is not conducive to the development of a green economy. Thus, the "Chinese-style fiscal decentralization" system distorts factor markets to a certain extent, causing problems such as resource mismatch and distortion of the fiscal expenditure structure, and the "race to the top" among local governments will gradually decrease (De Siano and D'uva 2017).
In addition, local governments also have significant short sightedness in environmental governance: first, it is difficult for local governments to take all factors into account in their fiscal decisions, and the results of environmental policies often have a certain "latency period" and the actual benefits are difficult to see in the short term, so local governments have an incentive to reduce their spending on environmental governance (Su et al. 2021;Ji et al. 2021); second, as a result of the local environmental protection system, environmental protection departments are mostly restricted, not only as part of local governments and under their leadership but also because their capital, including human and financial resources, is controlled by local governments, and they inevitably cater to the short-sighted decisions of local governments to obtain short-term performance; finally, although some of the indicators of local governments are assessed by the "one-vote veto system," local government assessment indexes continue to use visible economic performance as the primary evaluation criterion, and local governments have incentives to ignore indicators such as ecological protection in order to achieve major indicators such as GDP growth and fiscal revenue increase. In summary, this paper proposes the following hypothesis: H1: Fiscal decentralization inhibits green economy development.
Notably, if fiscal decentralization has a negative impact on the development of a green economy, is there an externality factor that can simultaneously meet the demand for green development and generate private profits for local governments? In other words, is there rent-seeking behavior that can generate private profits for local governments by "washing green"? In promoting the transformation of the green economy, the central government pays special attention to the core research of green and low-carbon technology and has been increasing the financial expenditure on green technology innovation in recent years.
Despite the high initial investment, long period, and lack of economies of scale in green technology innovation research and development (Song et al. 2019), the purpose of green technology application is to improve the efficiency of enterprise resource utilization, reduce enterprise compliance costs, achieve enterprise pollution reduction and environmental management, and thus promote green economic development. Green technology innovation is shifting from "quantity" to "quality" in each region, and it can be achieved by releasing the effect of energy savings and emission reduction, promoting the cleanliness of industrial structures, and stimulating the local market for science and innovation (Kunapatarawong and Martínez-Ros 2016;Wang et al. 2021a, b), further promoting high-quality economic development. In their study of Pakistan's energy problems, Zheng et al. (2022a, b, c) found that technological advancements have significantly improved energy efficiency and are environmentally sound. This effect is especially pronounced in developing nations. Local governments can influence the efficiency of resource allocation through welfare policies, public goods allocation, and taxation systems, which, in turn, guide the strategic decisions of enterprises. However, green technology innovation not only has the characteristics of certain public goods, but the social benefits are far greater than the individual benefits, making it difficult for subjects to receive compensation for innovation by reducing investment in this area. Local governments can encourage green technology innovation through tax breaks, financial subsidies, and measures to strengthen the protection of enterprise property rights so as to achieve the effective allocation of resources and the sustainable development of the green economy.
In order to maximize their own interests during their tenure, local governments with high financial autonomy will use their own jurisdiction to support short and quick projects that satisfy the "performance" assessment and produce quick results, thereby ignoring innovation projects with high R&D investment and long development projects and weakening the innovation motivation of economic agents through government intervention. Through government-enterprise collusion and biased investment promotion, this can also diminish the incentive for economic agents to innovate (Guo et al. 2020). Local governments stimulate local firms' investment in R&D and production activities in order to reach promotion performance, but environmental supervision to improve environmental quality is greatly detrimental to the long-term development of industrial enterprises, such as heavy pollution . In areas where regulation is weak, this contradiction between government performance and corporate profitability can lead to a collusive relationship between local governments and enterprises, with rent-seeking instruments such as biased financial subsidies and lax environmental policy restrictions, which are, mainly, at the expense of the environment, achieving a "win-win" situation for both local governments and enterprises. Currently, not only is it difficult to quantify the performance evaluation system of environmental governance, but also the application of green fiscal expenditure projects lacks the same intuition of beneficiaries as general public goods, which makes it difficult to make objective judgments and precise monitoring, and such ambiguous criteria provide space for local governments and market players to collude under the guise of "green." But what is more noteworthy is whether local governments are motivated to use the green technological innovation of economic agents to cover up the decline in environmental governance caused by their own "political performance." In other words, can local governments wash green by this means and thus achieve their own goals by "fighting for big with small" or even doing nothing? When individual market players have obvious advantages in the "quantity" of green technology innovation in the previous year, local governments can increase their support without considering the "quality," which not only improves the performance evaluation of local governments but also meets the interests of individual market players. This can not only improve the performance evaluation of local governments but also accommodate the needs of individual market participants. However, such biased support is not conducive to the effective allocation of government resources and may even impede green technological innovation activities that are truly used to improve environmental quality, thus hindering the development of a green economy. To sum up, this paper proposes the following hypothesis about the "greening" behavior of local governments. H2: Regional green technology innovation amplifies the negative impact of fiscal decentralization on green economic development.

Data resource
In view of the availability of data, this paper selects panel data of 30 provinces, municipalities, and autonomous regions (

Measurement of green economic
Traditional models involving factors such as the environment have not taken into account total factor productivity as a key indicator of whether a country's economy is growing in a sustainable manner. Existing literature on the measurement of green economic efficiency includes the TEP model (Zhu et al. 2018), the DEA model (Zhang et al. 2021), the DEA-Tobit model (Shuai and Fan 2020), the STIRPAT model (Rasoulinezhad and Taghizadeh-Hesary 2022), etc. In this paper, regional CO2 emissions are included in the analysis system as an additional non-desired output when both nondesired outputs are considered, and the Super-SBM model proposed by Tone (2002) based on modified slack variables is used to measure the green low-carbon economy. The model assumes that there are QUOTE decision units in the production system, and each decision unit has three vectors, which are input QUOTE , output QUOTE and non-desired output QUOTE , and QUOTE , QUOTE and QUOTE denote the number of input indicators, the number of desired outputs, and the number of non-desired outputs, respectively. QUOTE is the target value, and when QUOTE , it means that the decision unit is valid, and vice versa. The specific model calculation is shown below.

Definitions of variable
Green economy (GE): This paper uses the green economy measurement model of model (1) to measure, and its input indicators are selected: human capital is selected as the number of employed people in the region at the end of the year, and the unit is 10,000 people; capital stock is calculated using the perpetual inventory method with 2000 as the base period, and the unit is billion yuan; energy input is measured using the annual energy consumption of each region, and the unit is million tce; considering the variability of R&D input intensity in each region, R&D input is selected as the input indicator, and the unit is billion yuan. The output index is measured by the real GDP of each region, and the unit is billion yuan, using 2000 as the base period. The undesirable outputs include emissions of industrial wastewater, sulfur dioxide, and dust or particulate matter in million tons, as well as emissions of carbon dioxide in million tons. Fiscal decentralization (FD): The degree of fiscal decentralization is measured by using "per capita provincial-level fiscal expenditure/(per capita provincial-level fiscal expenditure + per capita central-level fiscal expenditure)," and it is replaced by fiscal revenue in the later paper as a robustness test replacement indicator.
Green technology innovation (GTI): Using "pollution control, pollution treatment, environmental materials, alternative energy, energy saving and emission reduction, recycling, new energy, green building, green management, green agriculture, green forestry" as keywords, the number of green technology applications in the year is matched in the State Intellectual Property Office, and the number of applications is measured by the level of green technology innovation, which is measured by adding one to the logarithm of the number of applications.
Considering the differences in regional economic development, the degree of environmental governance and the different supports of local environmental policies, the control variables selected in this paper include: ①. The degree of the openness of economy (OPE), measured by the proportion of the actual amount of foreign direct investment utilized in the region to the nominal GDP of the region; ②. Urbanization level (URL), measured by the proportion of urban population in the region; ③. Regional R&D investment (RD), measured by the share of the region's internal R&D expenditure in nominal GDP; ④. The advanced regional industrial structure (ISU), which refers to the process of shifting the center of gravity of the regional industrial structure from the primary and secondary industries to the tertiary industry, signifies the level of regional economic development, and is measured by the share of the value added of the tertiary industry in the regional nominal GDP; ⑤. Market-based environmental regulation intensity (MER), which measures the intensity of market-based environmental regulation in the form of logarithm of emission fee revenue. Table 1 gives descriptive statistics for all the above variables.

Econometric regression model
Considering that there is a certain lag between green economy and green technology innovation, the first-order lag term of both is added in the model setting. In order to study the relationship between fiscal decentralization and green economic growth, the following dynamic panel data model is constructed in this paper: where i and t represent provinces, cities, autonomous regions, and years, respectively, and the model controls for both year and region variables. Controls i,t refers to the control variables, and ε i,t is a random disturbance term. FD i,t indicates the degree of local government fiscal decentralization in year t. When α 2 is significantly less than 0, it means that, as the degree of local government fiscal decentralization increases, it will be detrimental to the development of green economy, i.e., hypothesis H1 holds.
Secondly, to test whether hypothesis H2 is valid, the interaction term between fiscal expenditure and green technological innovation with a 1-year lag ( FD i,t * GTI i,t−1 ) is introduced, and the following model is further constructed: where a significantly negative coefficient on β 4 implies that hypothesis H2 holds, and vice versa.

Benchmark analysis
Before analyzing the empirical results, this paper is based on the data of 30 provincial and urban areas for a total of 12 years, from 2006 to 2008, and the empirical results are shown in Table 2 after fixing the province fixed effects and year fixed effects.
Column (1) shows the empirical results based on model (2), which indicates that the coefficient of FD is negative at the 10% significance level, indicating that, as the degree of fiscal decentralization increases, it is detrimental to the development of the green economy; (2) GE i,t = β 0 + β 1 GE i,t−1 + β 2 FD i,t + β 3 GTI i,t−1 + β 4 FD i,t * GTI i,t−1 +Controls i,t + δ i + δ t + ε i,t therefore, hypothesis H1 is supported. This means that, as local governments' fiscal autonomy increases, they are more likely to prioritize economic growth over the allocation of market resources, which is not conducive to the control of environmental pollution (Xin and Qian 2022). At the 5% significance level, the coefficients of both the urbanization level and advanced industrial structure are positive, which is consistent with the expectation that green economy development will be promoted (Shen and Ren 2022). However, local R&D investment is significantly detrimental to the development of the green economy. Regional R&D expenditures are primarily used for R&D projects that promote economic growth, and it is difficult for China to quickly abandon a production method that depletes environmental resources.
Column (2) displays the empirical results based on model (3), where the coefficient of FD * L.EGI is negative at a significance level of 5%, indicating that, as local green technological innovation activity increases in the preceding period, local governments will use it to "green" the fact that they sacrifice the natural environment to achieve economic growth or private purposes when their financial autonomy increases. The H2 hypothesis is valid.

Robustness analysis
Additional control variables are added: It should be noted that the significance of environmental pollution control varies across regions as a result of differences in resource endowment and local government. Considering that pollution control investment also influences green economy development, the degree of importance of pollution control by local governments (PIS QUOTE ) is introduced into the model as a control variable, which is calculated as "local pollution control investment completion amount/ local nominal GDP," and the regression results are shown in column (1) ( Table 3). Although PIS QUOTE has no significant impact on green economy development, the coefficient of FD is still significantly negative at this time.
Replace the fiscal decentralization indicator: The above measure of fiscal decentralization is "per capita provinciallevel fiscal expenditure/(per capita provincial-level fiscal expenditure + per capita central-level fiscal expenditure)," which proves that fiscal decentralization is not conducive to the development of the green economy. The regression results are shown in column (2). At this point, the significance levels of the coefficients of FD are all the same as the previous test, and all of them are negative; therefore, the above conclusion is reliable.
Endogeneity analysis: Since the green economic indicators with a one-period lag are included in the process of setting the econometric model, considering the possible endogeneity problem, this paper re-tests the conclusions of the benchmark regression by the systematic GMM method, as shown in column (3). The p-value of AR (1) is significantly less than 0.01, whereas the p-value of AR (2) is greater than 0.1, indicating that the first-order series are autocorrelated and the second-order series are highly uncorrelated. And the second-order series is highly uncorrelated, which meets the requirements of the systematic GMM. Moreover, the p-value of the Sargan test remained within an acceptable range. At this time, the results indicate that the coefficient of FD is negative at a significance level of 10%, supporting the robustness and reasonableness of the benchmark regression presented in this paper.

Heterogeneity analysis
The geographical development of the green economy in China in 2018 is depicted in Fig. 1. In the study period of 2018, the green economy development efficiency of Beijing reached 1.217, followed by Hainan Province and Shanghai City, of which Shanxi Province has the highest growth rate of green economy development efficiency ringing the 2017 year, but, similar to Shaanxi Province, Guizhou Province, Yunnan Province, Gansu Province, Qinghai Province, Ningxia City, etc., maintained at about the 0.4 level, in the low efficiency stage of the green lowcarbon economic development. From the available data, it can be seen that the level of green low-carbon economy development in each region of China shows significant regional differences.
Local governments can achieve green economic development by actively adjusting the allocation of fiscal expenditures, indirectly influencing enterprises through R&D subsidies and taxes, or directly acting on environmental management, but the support of the central government, the "visible hand," cannot be ignored. The actual R&D subsidies received by businesses are comprised of both local government expenditures and central government transfer payments. In the absence of regulatory constraints, local governments have an incentive to misappropriate funds that should be used for R&D subsidies in order to advance their own hidden interests, such as rent-seeking gains (Liu et al. 2017;Gao et al. 2019). Therefore, this paper will further analyze whether the above findings are significantly heterogeneous in China's natural geographical divisions or in policy administrative regions with special support.

Heterogeneity analysis based on the eastern, central, and western regions of China
Since the natural resources, natural conditions, geographic location, and economic development level of each region in China have significant differences, the energy consumption structure of enterprises and the focus of technological innovation also have significant regional characteristics; therefore, this paper refers to the empirical literature to divide China's provinces, cities, and autonomous regions into three major economic zones. The eastern region includes Beijing, Tianjin, Hebei, Liaoning, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Guangdong, Guangxi, and Hainan; the central region includes Shanxi, Inner Mongolia, Jilin, Heilongjiang, Anhui, Jiangxi, Henan, Hubei, and Hunan; and the western region includes Chongqing, Sichuan, Guizhou, Yunnan, Shaanxi, Gansu, Ningxia, Qinghai, and Xinjiang. Based on the above division with a view to studying the impact of heterogeneity due to geographical differences, the results are shown in Table 4.
From the central region group in Table 4, the coefficients of in econometric model (1) and FD * L.EGI in model (2) are negative at 10% and 5% significance levels, respectively, which is consistent with the previous findings that the higher degree of local government financial autonomy in the central region is not only detrimental to green economic development but also amplifies this negative impact through local green technology innovation activities. In the western region group, only the coefficient of FD * L.EGI in model (2) is significantly negative at the 10% level, indicating that government decentralization of local governments in the western region has no significant impact on green economic development, but there is still a reliance on local green technology innovation activities that could have a hindering effect on green economic development. In the eastern region, the above findings are not significantly supported by the sample data, implying that the eastern local governments generally do not sacrifice the environment to achieve economic development.

Heterogeneity analysis based on the Yangtze River Economic Belt
As the center of gravity of China's economic development and the first demonstration belt of ecological civilization construction, the Yangtze River Economic Belt includes a total of 11 provinces and municipalities in its region, including Shanghai, Jiangsu, Zhejiang, Anhui, Jiangxi, Hubei, Hunan, Chongqing, Sichuan, Yunnan, and Guizhou. At the end of 2018, the CPC Central Committee and the State Council emphasized that the Yangtze River Economic Belt should give full play to the advantages of the plates straddling the middle, east, and west, lead by green development, and promote the region to achieve high-quality development. In 2018-2020 alone, the central government's arrangements for various transfer payments to the provinces along the Yangtze River Economic Belt amounted to 9.6 trillion yuan, with an average annual growth of about 11.8%, accounting for 40.8% of the total transfers from the central government to local governments. This paper considers the "lure" of such a huge transfer to local governments based on which the heterogeneity analysis of the policy regional division concluded above is carried out, and the results are shown in Table 5.
From the regression results of the Yangtze River Economic Zone region in Table 5, only the coefficient of FD in the econometric model (1) is negative at the 10% significance level, while the coefficient of FD * L.EGI in model (2) is not significant. In the Yangtze River Economic Zone, with the increased decentralization of local governments, local governments still have an incentive to sacrifice environmental quality to promote economic development but do not "green" their behavior with green technology innovation activities. This means that fiscal spending and environmental regulation are stricter in the Yangtze River Economic Zone, but the focus of development remains on regional economic development.

Further study
Based on the hypothesis that "fiscal decentralization inhibits green economic development," this paper supports the hypothesis that the "GDP-only" performance assessment of local governments, as well as the shortsightedness and "collusion" motives of local officials in "promotion," have negative environmental impacts. Using the same sample data, this study examines whether there is a significant difference between fiscal decentralization and regional green economic development. For the measurement of regional economic growth indicators, quantitative and qualitative indicators are selected with reference to existing literature. In this part, first, the growth rate of regional nominal GDP ( QUOTE GDPRATE ) is selected to measure regional economic growth; second, based on the input-output perspective, the stochastic frontier method of a parametric approach is used to calculate regional total factor productivity ( QUOTE SFA ) to measure regional economic growth (Zhou et al. 2012), where the input variables are selected as capital stock and human capital in the above and the output variables are used as local real GDP, and Frontier4.1 software is used to calculate total factor productivity. The specific regression results are shown in Table 6. According to the regression results in columns (1) and (3), even after substituting the measure of regional economic growth, the coefficient of FD is still negative at a significance level of 5%, indicating that fiscal decentralization is advantageous for promoting regional economic growth. Moreover, after replacing the measure of FD with fiscal expenditure, the results are shown in columns (2) and (4), and the coefficients are still negative at the 5% significance level, which proves that the above findings are robust. Thus, fiscal decentralization can promote regional economic growth (Otoo and Danquah 2021) but is detrimental to local government pollution control, leading to inefficient green economic development. Safi et al. (2022) also demonstrated that fiscal decentralization is detrimental to local environmental governance in the long run, such as by increasing the carbon intensity of the region.
Additionally, this paper analyzes the heterogeneity based on the regional divisions of East, Central, and West China as well as the Yangtze River Economic Belt region. However, only the Eastern region and the Yangtze River Economic Belt region have significant effects of fiscal decentralization on regional economic development. In Table 7, we present the results for the eastern region and the Yangtze River Economic Belt, but the rest of the data are not shown. Both columns (1) and (2) are benchmark regressions, while columns (3) and (4) are robustness tests after replacing the FD indicator measure with fiscal spending.
The findings indicate that fiscal decentralization significantly promotes economic development in the eastern region and the Yangtze River Economic Belt region of China. In contrast to the results of the heterogeneity analysis of the impact of fiscal decentralization on green economy in the previous paper, we find that, for the eastern region, this suppressive effect of green economy caused by the political promotion motive and self-interested preferential expenditure of local government officials is no longer significant, while, for the Yangtze River Economic Belt region, fiscal decentralization inhibits the development of green economy, and the result is opposite to that of the eastern region; for the  central region, with the increase of fiscal decentralization, local government officials do not effectively drive economic growth, and the same negative effects of political promotion motives and self-interested preferential spending of local officials exist; for the western region, although the degree of fiscal decentralization of local governments does not inhibit green economic growth, it does not significantly drive economic growth.

Conclusion and implication
Realizing the transition to a green economy has become an urgent need for the majority of developing nations (Khan et al. 2022), and research on how to promote it through government functions is receiving increasing attention. This study selects sample data from 30 provinces, municipalities, and autonomous regions (excluding Hong Kong, Macao, Taiwan, and Tibetan regions) in China from 2006 to 2018 to empirically study the impact of fiscal decentralization on the green economy and further investigate the moderating relationship between green technological innovation on both. We employ the Super-SBM model and the SFA model to assess China's green economy development level and regional economic growth, respectively. The level of regional green technology innovation is presented, and panel data regression is used to examine their relationship. In addition, we improve the robustness of econometric methods by modifying the measurement methods of a few variable series.
Overall, fiscal decentralization is detrimental to the development of the green economy and will amplify this negative impact as previous green technology innovation activities increase. Taking into account the differences in the level of development in different regions, we performed a series of heterogeneity analyses. In the central region, fiscal decentralization has a significant impact on the aforementioned findings, while, in the Yangtze River Economic Zone, fiscal decentralization remains detrimental to the development of the green economy, but the negative regulation of the lag of green technological innovation activities loses its effect. After the comparative analysis with the introduction of regional economic growth indicators, fiscal decentralization is beneficial to promote economic growth only in the eastern region and the Yangtze River Economic Belt region.
The aforementioned findings demonstrate that the influence of local governments on economic development and green economy development under the fiscal decentralization system is significantly heterogeneous in China's natural geographical divisions or policy administrative regions with special support, which has profound implications for the central government to restrain and regulate the behavior of local governments to achieve sustainable economic development.
In the context of China's transformation from "double control" to "double control" of energy consumption and the promotion of green economy development, this paper has the following policy recommendations for local governments to give full play to the role of regional economic guidance: Firstly, there should not be a one-size-fits-all approach to the formulation of policies to guide environmentally friendly development. This study finds that the relationship between fiscal decentralization, green technological innovation activities, and green economy in different regions shows significant heterogeneity, especially in the central region, where fiscal decentralization does not sufficiently drive regional economic growth and inhibits the development of green economy, but, in the eastern region, local governments generally do not have these problems. We recommend that policymakers formulate multi-level and multi-objective green economic growth strategies based on the natural resource endowments, industrial structure, and market environment of each region.
Secondly, bolster the green economic development of the leading green demonstration zones in order to achieve the initial economic transformation. Taking the Yangtze River Economic Zone as an example, with the support of the central fiscal steering transfer policy, local green technology innovation activities can basically meet the requirements of environmental management adequately, but the negative impact of fiscal decentralization on green economic development still exists. Therefore, policymakers must regulate the fiscal expenditure of local governments in such green demonstration areas, formulate and improve the completion of green support projects, etc., crack down severely on local government speculation, and then give play to the policy radiation effect and promote the green economy transformation of regions along the route. Thirdly, accelerate the transformation of local government officials' governance and strengthen the central government's tracking of funds for local funding projects as well as the supervision of local government behavior. Since performance-based assessment indicators are easy to quantify, some officials undoubtedly choose "short and quick" superficial projects to "show merit" without regard to the ecological environment or long-term public welfare, completely detaching themselves from the public. First and foremost, it is necessary to build a dynamic evaluation system of indicators for government managers at all levels, involving both the overall economic development and the assessment of green performance indicators, and fully including the opinions of local people. In addition, it is crucial to improve the tracking and detailed monitoring of funds allocated by the central government for funding projects in order to achieve the central policy's intended goals.
A limitation of this study is that it was not possible to limit the subjects to a sample of cities, and interregional associations were not analyzed. Future research may employ this method of analysis. Due to data limitations, this study used data through 2018 to construct the green economy index, especially when excluding pollutant factors such as sulfur dioxide emissions. Future researchers might use utilize complete data to develop indicators.

Data availability
The data on the quality of export products in the article comes from China Statistical Yearbook, China Energy Statistical Yearbook, China Science and Technology Statistical Yearbook, China Environmental Statistical Yearbook, China Environmental Yearbook, China Tax Statistical Yearbook, National Bureau of Statistics, State Intellectual Property Office and the gazette of provincial statistical bureaus, where the CO2 emission data of provinces, municipalities, and autonomous regions are obtained from the CEADs database.

Declarations
Ethics approval and consent to participate There is no personal information involved in the manuscript.

Consent for publication
This manuscript does not contain data from any person.

Competing interests
The authors declare no competing interests.