Integration into the International Economic Cycle, Shift in Growth Drivers, and Green Innovation in Manufacturing

This study investigates the impact of integration into the international economic cycle (IEC) on green innovation in China’s manufacturing sector, a key factor in the country’s green strategic transformation. Using multi-regional input–output tables for both global and Chinese contexts from 2012 to 2017, alongside data from listed manufacturing firms, the analysis demonstrates that IEC integration significantly promotes green innovation in Chinese manufacturing enterprises. The mechanisms of innovation-driven development and the upgrading of production capital structure are central to this effect. Economic cycles involving Europe and developing economies exert a strong positive influence on green innovation, whereas demand from North America and East Asia has a comparatively weaker effect. State-owned and high-tech enterprises are identified as primary drivers of green innovation through IEC integration. The findings also indicate a high degree of dependence of China’s economy on the IEC. However, reliance on IEC integration alone may result in market failure, underscoring the essential role of government environmental regulation and macroeconomic guidance. The study provides valuable insights into the transformation and advancement of manufacturing and high-quality development within the context of the modernization of China.