Empirical Analysis of Environmental Innovation and Economic Growth in Western Region

This article chooses the evaluation index from The Report of Sustainable Development Strategy of China and quantifies the environmental innovation level. We exploit the data of western region from the year 1995 to 2010 and forecast the regional environmental innovation level in 2011 and 2012 through ARIMA model. The result of prediction indicates the tendency of stable increase of this level. We then use unit root test, co-integration analysis and Granger Causality to test the relationship between the environmental innovation and economic growth. The result shows the long-term equilibrium relationship between them; environmental innovation has positive external spillover effects on economic growth and they follow the Granger Causality. The results of empirical analysis comply with the situation of societal and economic development of western area. Finally, the relevant policy recommendations are proposed.