Abstract: Green technological innovation is the key to promoting industrial structure upgrading and achieving high-quality development. Based on the practice of the "de-capacity" policy, this paper selected the manufacturing-listed companies from 2009 to 2018 as the research sample, and used the Difference-in-Difference (DID) model to explore the impact, mechanisms and heterogeneity of the policy on green technological innovation. The study found that the "de-capacity" policy significantly promotes firm′s green technological innovation through direct and indirect effects. After several robustness tests, it was confirmed that the impact of the "de-capacity" policy on the quality of green technological innovation is more robust. The heterogeneity analysis showed that the "de-capacity" policy positively promotes green technological innovation quality in state-owned firms and firms located in regions with strong policy intervention, but has a slight negative impact on non-state-owned firms. The mechanism analysis revealed that the "de-capacity" policy indirectly promotes firms′ green technological innovation by optimizing the allocation of innovation resources and enhancing innovation compensation. This study has provided an in-depth exploration of the effects of suppressive industrial policies on green technological innovation, thus offering valuable insights for the differentiated implementation of the "de-capacity" policy and the practice of green innovation-driven development strategies.

Key words: suppressive industrial policy, "de-capacity" policy, green technology innovation, innovation compensation, innovation resource allocation