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Policy incentives and collaborative diffusion of urban green innovation: Based on the green credit subsidy policy

Author

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  • Liu, Meiyu
  • Duan, Hongli
  • Cui, Huiru

Abstract

In this study, 2688 observations of 168 Chinese cities from the years 2007 to 2022 are taken as the sample for investigating the influence of the green credit subsidy policy on urban green innovation and its spatial diffusion effects. The following conclusions are drawn: (1) The green credit subsidy policy has a significant incentive effect on urban green innovation, which persists across a range of rigorous robustness tests. (2) The heterogeneity tests reveal that the influences display notable heterogeneity across different types of cities. (3) The mechanism tests reveals that foreign direct investment serves as an intermediary factor linking the green credit subsidy policy and urban green innovation. (4) The spatial effect test demonstrates that the green credit subsidy policy not only stimulates green innovation within a given city but also has spillover effects on adjacent cities. The results provide robust empirical evidence and valuable policy insights for fostering a regional green development community.

Suggested Citation

  • Liu, Meiyu & Duan, Hongli & Cui, Huiru, 2025. "Policy incentives and collaborative diffusion of urban green innovation: Based on the green credit subsidy policy," Economic Analysis and Policy, Elsevier, vol. 87(C), pages 2520-2533.
    • Handle: RePEc:eee:ecanpo:v:87:y:2025:i:c:p:2520-2533
    DOI: 10.1016/j.eap.2025.08.041
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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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