The asymmetric relationship between sustainable innovation and industrial transformation and upgrading: Evidence from China?s provincial panel data

Previous studies have considered the one-way relationship between sustainable innovation and industrial transformation or upgrading. This research further investigates the asymmetric relationship between sustainable innovation and industrial transformation or upgrading from long-term and short-term perspectives. We analyse 30 provinces in China from 2001 to 2020 using ordinary least squares and panel quantile regression models to explore the positive effect of sustainable innovation on industrial transformation and upgrading with spatio-temporal heterogeneity. The panel autoregressive distributed lag (ARDL) model and panel vector autoregression (PVAR) further survey the causal relationship between sustainable innovation and industrial transformation and upgrading. The findings reveal that sustainable innovation promoted advancing industrial structures over the long-term and short-term promotion of industrial structure rationalisation. Simultaneously, there are low mutual coordination and extension between sustainable innovation and industrial transformation and upgrading. For regions with high coordination between sustainable innovation and industrial transformation and upgrading, the interaction between sustainable innovation and the advanced industrial structure is more pronounced. The pa-per's results confirm the asymmetric relationship between sustainable innovation and industrial transformation and upgrading, and the findings have crucial significance for the sustainable development of China's economy.