Green innovation transformation, economic sustainability and energy consumption during China's new normal stage.

As China's economy is transforming into a new normal stage, the energy industry is becoming increasingly innovation-driven, which is shown particularly in renewable energy. Given that the green innovation transformation is crucially critical during China's new normal stage, this paper analyzes the direct impact of energy consumption on energy innovation and innovation transformation, and reveals the net effect of green innovation transformation on economic sustainability and energy consumption. Micro and macro empirical evidence are both provided in this paper by implementing two estimation methodologies: fixed effect model and Generalized Method of Moments (GMM) Vector AutoRegression (VAR) approach, respectively. Estimating Chinese micro 153 listed energy companies' data and macro 30 provincial data from 2009 to 2016, we find that: (1) In terms of energy enterprises' innovation activity behavior, energy consumption could promote total energy innovation, of which renewable energy innovation is stimulated far more significantly. (2) There is an increasing tendency for energy structure to transform into renewables as the energy consumption increases. (3) The green innovation transformation, instead of total innovation counts, can reduce energy consumption and benefit economic sustainability. Therefore, the structure of innovation transformation plays more significant role than total energy innovation in stimulating economic growth, and alleviating the energy consumption antinomy during China's new normal stage. In this regard, in order to stimulate green energy transformation, government should implement financing policy, reduce administrative intervention, upgrade energy legal system and improve energy pricing mechanism to encourage more research and development (R&D) activities at the core of renewable energy. • Provide evidence from both micro- and macro-economic perspectives. • Energy consumption stimulates renewable energy innovations more. • Transformation towards renewables is driven by high energy consumption. • Green innovation transformation decreases energy consumption in the long run. • Green innovation transformation benefits economic sustainability. [ABSTRACT FROM AUTHOR]