Green technology innovation and urban sprawl in China: Theory and mechanism

Green technology innovation (GTI) serves as an important market-endogenous force for restraining urban sprawl in China. Using panel data for 273 prefecture-level cities from 2006 to 2022, we estimate fixed-effects panel models and assess potential channels and conditional effects. We further apply a spatial Durbin model (SDM) with effect decomposition to quantify spillovers and identify the effective spillover range. The main findings are as follows. (1) GTI significantly curbs local urban sprawl and generates negative spillover effects on nearby cities, with an effective spillover range of about 450 km. (2) Air quality improvement plays an important role. GTI reduces PM_2.5 concentrations and industrial sulfur dioxide emissions, enhances local livability, and supports more compact development. Meanwhile, industrial structure path dependence and technology lock-in mean that GTI can hinder industrial upgrading, generating a masking effect that offsets part of its sprawl-restraining impact. (3) The scale of industrial land strengthens the restraining effect, indicating that GTI is more effective when embedded in green retrofits and the reuse of underperforming industrial stock, which releases internal spatial capacity and lowers marginal demand for outward expansion. (4) Heterogeneity tests show that spillovers are notably weaker in resource-based cities, and the restraining effect becomes statistically insignificant in regions west of the Hu Huanyong Line. These findings highlight GTI as an important complement to conventional urban sprawl controls and underscore the need to incorporate spatial interaction and local constraints into innovation-oriented urban governance. Copyright © 2026. Published by Elsevier Inc.