Innovative green economy, urban economic performance and urban environments: an empirical analysis of US cities

Green-city innovation uses industrial and entrepreneurial ecosystems that can reduce environmental and ecological risks and achieve sustainable urban development without degrading urban environments. In a city, entrepreneurship ecosystems include start-ups and supporting networks of coordinating entities which contribute to economies of scale; however, these systems may make a city’s green environment worse, by contributing to air or water pollution. Even though there is a widely held perception of an adverse relationship between urban economic performance and urban environmental conditions, green-city development involving clean industries can be a way to attract employees without affecting urban environments negatively. However, there is a dearth of empirical studies that examine how such a green-related innovative entrepreneurial system could become a growth engine of cities. This paper examines whether a greener city can contribute to the economic prosperity of the city. A two-stage econometrics approach is the method applied, using data from 2000 and 2005. This paper contributes to the field by distinguishing concerns about urban environments in green cities from concerns about economic performances related to innovative and entrepreneurial ecosystems.