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Low-carbon city pilot policy and enterprise low-carbon innovation–A quasi-natural experiment from China

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  • Luo, Yonggen
  • Liu, Yue
  • Wang, Deli
  • Han, Wenqi

Abstract

This study investigates whether the implementation of this policy fosters low-carbon innovation amongst enterprises and identifies the mechanisms underpinning its effects. Utilising low-carbon patent authorisation data from A-share listed companies in the Shanghai and Shenzhen stock markets between 2008 and 2019, this study employs a difference-in-differences model to conduct a multi-dimensional empirical examination of these questions. The findings indicate that the low-carbon city pilot policy can stimulate low-carbon innovation at the enterprise level to a certain extent, and this conclusion remains robust after a series of rigorous tests. The impact of low-carbon innovation is more pronounced in the authorisation of invention patents, with the pilot policy exerting a more significant influence on state-owned enterprises and enterprises with strong political affiliations. Further analysis reveals that government subsidies constitute the primary mechanism through which the pilot policy takes effect, effectively promoting low-carbon innovation in enterprises. This paper offers theoretical and empirical support for evaluating the low-carbon city pilot policy at the enterprise level and advances policy implications in three areas: further policy development, enterprise characteristics, and the application of various policy instruments.

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  • Luo, Yonggen & Liu, Yue & Wang, Deli & Han, Wenqi, 2024. "Low-carbon city pilot policy and enterprise low-carbon innovation–A quasi-natural experiment from China," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 204-222.
    • Handle: RePEc:eee:ecanpo:v:83:y:2024:i:c:p:204-222
    DOI: 10.1016/j.eap.2024.06.014
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    3. Tengfei Zhao & Jianlin Zhu & Zhiyu Jian & Xian Zhou & Puwei Zhang, 2024. "Effects of the “Urban Double Repairs” Policy on Urban Land-Use Carbon Emission Efficiency," Sustainability, MDPI, vol. 16(23), pages 1-24, November.
    4. Ying Fu & Zhaohan Wang & Yun Wang, 2024. "Green Financial Policy for Fostering Green Technological Innovation: The Role of Financing Constraints, Science Expenditure, and Heightened Industrial Structure," Sustainability, MDPI, vol. 16(20), pages 1-26, October.
    5. Yanran Peng & Zhong Wang & Yunhui Zhang & Wei Wang, 2025. "Facilitating or Hindering? The Impact of Low-Carbon Pilot Policies on Socio-Ecological Resilience in Resource-Based Cities," Land, MDPI, vol. 14(1), pages 1-28, January.
    6. Wang, Yuzhang & Wang, Shuo & Wang, Xinjie, 2025. "Green mergers and acquisitions in corporate low-carbon transition: A driving mechanism based on dual external pressures," International Review of Economics & Finance, Elsevier, vol. 98(C).
    7. Gao, Xing & Lai, Xinjie & Tang, Xuan & Li, Yue, 2024. "Does environmental regulation affect corporate environmental awareness? A quasi-natural experiment based on low-carbon city pilot policy," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 1164-1184.

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