IDEAS home Printed from https://ideas.repec.org/a/eee/ecofin/v81y2026ics1062940825001883.html

Does innovation-driven policy optimize urban energy consumption? Evidence from China’s innovation-driven city pilot policies

Author

Listed:
  • Cong, Yingnan
  • Hou, Yufei
  • Ji, Yuan
  • Cai, Xiaojing

Abstract

Restructuring energy consumption is essential for promoting green, low-carbon economic and societal development. Innovation-driven policies, particularly those implemented in pilot cities, play a crucial role in this transformation. This study conducts a theoretical analysis to examine how such policies influence urban energy-consumption structures. Using a multitime-point difference-in-differences model, it treats China’s national innovation-driven city pilot policies as a quasi-natural experiment. The results indicate that these policies significantly improve urban energy structures. Mechanism analyses reveal that the improvements occur mainly through green innovation and industrial upgrading. Heterogeneity analysis further indicates that the effects are more pronounced in cities with lower administrative tiers, more challenging geographical conditions, and stronger environmental priorities. These findings provide valuable policy insights for refining innovation-driven strategies, enhancing urban energy-consumption structures, and promoting sustainable economic development in China.

Suggested Citation

  • Cong, Yingnan & Hou, Yufei & Ji, Yuan & Cai, Xiaojing, 2026. "Does innovation-driven policy optimize urban energy consumption? Evidence from China’s innovation-driven city pilot policies," The North American Journal of Economics and Finance, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:ecofin:v:81:y:2026:i:c:s1062940825001883
    DOI: 10.1016/j.najef.2025.102548
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1062940825001883
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.najef.2025.102548?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Yating Zeng & Xinyue Xu & Yuyao Zhao & Bin Li, 2023. "Impact of Digital Economy on the Upgrading of Energy Consumption Structure: Evidence from Mainland China," Sustainability, MDPI, vol. 15(7), pages 1-18, March.
    2. Shengjun Yuan & Jie Li & Jun Wu, 2023. "Examining the Promotional Effect and Mechanism of Innovative City Pilot Policy on City Brand Development," Sustainability, MDPI, vol. 15(3), pages 1-16, January.
    3. Nathan Nunn & Nancy Qian, 2014. "US Food Aid and Civil Conflict," American Economic Review, American Economic Association, vol. 104(6), pages 1630-1666, June.
    4. Gao, Kang & Yuan, Yijun, 2022. "Government intervention, spillover effect and urban innovation performance: Empirical evidence from national innovative city pilot policy in China," Technology in Society, Elsevier, vol. 70(C).
    5. Du, Kerui & Cheng, Yuanyuan & Yao, Xin, 2021. "Environmental regulation, green technology innovation, and industrial structure upgrading: The road to the green transformation of Chinese cities," Energy Economics, Elsevier, vol. 98(C).
    6. Zhang, Shaopeng & Wang, Xiaohong, 2022. "Does innovative city construction improve the industry–university–research knowledge flow in urban China?," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    7. Gehrsitz, Markus, 2017. "The effect of low emission zones on air pollution and infant health," Journal of Environmental Economics and Management, Elsevier, vol. 83(C), pages 121-144.
    8. Sun, Haiyan & Chen, Fushan, 2022. "The impact of green finance on China's regional energy consumption structure based on system GMM," Resources Policy, Elsevier, vol. 76(C).
    9. Liu, Tie-Ying, 2025. "Do industrial robots optimize the energy structure? Evidence from fossil energy consumption," Energy Economics, Elsevier, vol. 148(C).
    10. Lin, Boqiang & Li, Zheng, 2022. "Towards world's low carbon development: The role of clean energy," Applied Energy, Elsevier, vol. 307(C).
    11. Hendrik Wolff, 2014. "Keep Your Clunker in the Suburb: Low‐emission Zones and Adoption of Green Vehicles," Economic Journal, Royal Economic Society, vol. 124(578), pages 481-512, August.
    12. Zetian Cui & Yancheng Ning & Jia Song & Jun Yang, 2024. "Impact of National Innovative City Policy on Enterprise Green Technology Innovation—Mediation Role of Innovation Environment and R&D Investment," Sustainability, MDPI, vol. 16(4), pages 1-16, February.
    13. Lee, Chien-Chiang & Wang, Chang-song & He, Zhiwen & Xing, Wen-wu & Wang, Keying, 2023. "How does green finance affect energy efficiency? The role of green technology innovation and energy structure," Renewable Energy, Elsevier, vol. 219(P1).
    14. Zeng, Juying & Ning, Zhenzhen & Lassala, Carlos & Ribeiro-Navarrete, Samuel, 2023. "Effect of innovative-city pilot policy on industry–university–research collaborative innovation," Journal of Business Research, Elsevier, vol. 162(C).
    15. Zhang, Pengfeng & Yu, Yingchi, 2024. "How does regional technological innovation affect energy poverty? The role of industrial structure distortion," Energy, Elsevier, vol. 291(C).
    16. Lina Liu & Yunyun Zhang & Bei Liu & Pishi Xiu & Lipeng Sun, 2022. "How to Achieve Carbon Neutrality: From the Perspective of Innovative City Pilot Policy in China," IJERPH, MDPI, vol. 19(24), pages 1-20, December.
    17. Xu, Ye & Wang, Zhi-Chao & Tao, Chang-Qi, 2024. "Can innovative pilot city policies improve the allocation level of innovation factors? – Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    18. Wenqi Zhao & Moau Yong Toh, 2023. "Impact of Innovative City Pilot Policy on Industrial Structure Upgrading in China," Sustainability, MDPI, vol. 15(9), pages 1-22, April.
    19. Liu, Biao & Li, Yanfeng & Liu, Jipeng & Hou, Yufei, 2024. "Does urban innovation policy accelerate the digital transformation of enterprises? Evidence based on the innovative City pilot policy," China Economic Review, Elsevier, vol. 85(C).
    20. Lianying Fu & Xu Han & Jizong Peng, 2025. "The impact of innovation-driven policies on urban resilience," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-16, December.
    21. Wolff, Hendrik, 2014. "Keep Your Clunker in the Suburb: Low Emission Zones and Adoption of Green Vehicles," IZA Discussion Papers 8180, IZA Network @ LISER.
    22. Yang, Zhenbing & Shao, Shuai & Yang, Lili & Miao, Zhuang, 2018. "Improvement pathway of energy consumption structure in China's industrial sector: From the perspective of directed technical change," Energy Economics, Elsevier, vol. 72(C), pages 166-176.
    23. Sun, Jiasen & Li, Guo & Wang, Zhaohua, 2018. "Optimizing China’s energy consumption structure under energy and carbon constraints," Structural Change and Economic Dynamics, Elsevier, vol. 47(C), pages 57-72.
    24. Du, Kerui & Li, Jianglong, 2019. "Towards a green world: How do green technology innovations affect total-factor carbon productivity," Energy Policy, Elsevier, vol. 131(C), pages 240-250.
    25. Pan, Minjie & Zhao, Xin & lv, Kangjuan & Rosak-Szyrocka, Joanna & Mentel, Grzegorz & Truskolaski, Tadeusz, 2023. "Internet development and carbon emission-reduction in the era of digitalization: Where will resource-based cities go?," Resources Policy, Elsevier, vol. 81(C).
    26. Mandi Tian & Zuoren Sun, 2024. "Does the Innovative City Pilot Policy Improve Urban Resilience? Evidence from China," Sustainability, MDPI, vol. 16(22), pages 1-27, November.
    27. Ma, Dan & Zhu, Yanjin & Lee, Chien-Chiang, 2025. "The impact of new energy pilot city policies on urban green innovation: Evidence from China’s city level," Economic Analysis and Policy, Elsevier, vol. 87(C), pages 585-604.
    28. Obuobi, Bright & Awuah, Faustina & Nketiah, Emmanuel & Adu-Gyamfi, Gibbson & Shi, Victor & Hu, Guoping, 2024. "The dynamics of green innovation, environmental policy and energy structure for environmental sustainability; Evidence from AfCFTA countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 197(C).
    29. Xue, Yan & Tang, Chang & Wu, Haitao & Liu, Jianmin & Hao, Yu, 2022. "The emerging driving force of energy consumption in China: Does digital economy development matter?," Energy Policy, Elsevier, vol. 165(C).
    30. Hu, Dianxi & Jiao, Jianling & Tang, Yunshu & Xu, Yuwen & Zha, Jianrui, 2022. "How global value chain participation affects green technology innovation processes: A moderated mediation model," Technology in Society, Elsevier, vol. 68(C).
    31. Li, Pei & Lu, Yi & Wang, Jin, 2016. "Does flattening government improve economic performance? Evidence from China," Journal of Development Economics, Elsevier, vol. 123(C), pages 18-37.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xu, Ye & Wang, Zhi-Chao & Tao, Chang-Qi, 2024. "Can innovative pilot city policies improve the allocation level of innovation factors? – Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    2. Guo, Bingnan & Wang, Yu & Zhang, Hao & Liang, Chunyan & Feng, Yu & Hu, Feng, 2023. "Impact of the digital economy on high-quality urban economic development: Evidence from Chinese cities," Economic Modelling, Elsevier, vol. 120(C).
    3. Xu, Lan & Yang, Jun & Cheng, Jixin & Dong, Hanghang, 2022. "How has China's low-carbon city pilot policy influenced its CO2 abatement costs? Analysis from the perspective of the shadow price," Energy Economics, Elsevier, vol. 115(C).
    4. Bing Kuang & Jinjin Liu & Xiangyu Fan, 2022. "Has China’s Low-Carbon City Construction Enhanced the Green Utilization Efficiency of Urban Land?," IJERPH, MDPI, vol. 19(16), pages 1-20, August.
    5. Wang, Ye & Yu, Feng & Lin, Faqin & Feng, Kuo, 2025. "Air quality impacts of EV promotion: Evidence from local charging pile adoption in China," Journal of Asian Economics, Elsevier, vol. 98(C).
    6. She, Yanan & Wang, Huan & Zhen, Shangsong & Peng, Yue & Wang, Wei & Liu, Yunqiang, 2025. "Two-way empowerment or one-way game? The impact of data factor endowment matching on enterprises’ green efficiency," Renewable and Sustainable Energy Reviews, Elsevier, vol. 208(C).
    7. Liu, Kang & Ren, Yi & Yang, Fei, 2024. "Do national innovation policies lead to technological specialization or diversification? The role of path dependence and spatial spillovers," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 499-520.
    8. Wang, Zhenzhen & Zhou, Feite & Zhong, Junhao, 2024. "Can China's low-carbon city pilot policy facilitate carbon neutrality? Evidence from a machine learning approach," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 756-773.
    9. Ping Guo & Jin Li & Jinsong Kuang & Yifei Zhu & Renrui Xiao & Donghao Duan & Baocong Huang, 2022. "Low-Carbon Governance, Fiscal Decentralization and Sulfur Dioxide Emissions: Evidence from a Quasi-Experiment with Chinese Heavy Pollution Enterprises," Sustainability, MDPI, vol. 14(6), pages 1-24, March.
    10. Chen, Shiyi & Jiang, Lingduo & Liu, Wanlin & Song, Hong, 2022. "Fireworks regulation, air pollution, and public health: Evidence from China," Regional Science and Urban Economics, Elsevier, vol. 92(C).
    11. Xianxian Fan & Yunlei Zhou & Qiang Xie, 2025. "Assessment on the synergistic effect of pollution and carbon reductions in low-carbon city pilot policy: based on effectiveness and efficiency perspectives," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(6), pages 12945-12969, June.
    12. 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.
    13. Xu, Ru-Yu & Wang, Ke-Liang & Miao, Zhuang, 2024. "The impact of digital technology innovation on green total-factor energy efficiency in China: Does economic development matter?," Energy Policy, Elsevier, vol. 194(C).
    14. Isaksen, Elisabeth T. & Johansen, Bjørn G., 2025. "Congestion pricing with electric vehicle exemptions: Car-ownership effects and other behavioral adjustments," Journal of Environmental Economics and Management, Elsevier, vol. 131(C).
    15. Isaksen, Elisabeth & Johansen, Bjørn G., 2021. "Congestion pricing, air pollution, and individual-level behavioural responses," LSE Research Online Documents on Economics 111493, London School of Economics and Political Science, LSE Library.
    16. Brehm, Johannes & Pestel, Nico & Schaffner, Sandra & Schmitz, Laura, 2025. "From Low Emission Zone to academic track: Environmental policy effects on educational achievement in elementary school," Journal of Environmental Economics and Management, Elsevier, vol. 132(C).
    17. Hannah Klauber & Felix Holub & Nicolas Koch & Nico Pestel & Nolan Ritter & Alexander Rohlf, 2024. "Killing Prescriptions Softly: Low Emission Zones and Child Health from Birth to School," American Economic Journal: Economic Policy, American Economic Association, vol. 16(2), pages 220-248, May.
    18. Shuhei Nishitateno & Paul J. Burke, 2024. "Effects of Low Emission Zones on Air Quality, New Vehicle Registrations, and Birthweights: Evidence from Japan," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(7), pages 1955-1992, July.
    19. Hongfeng Zhang & Lu Huang & Yan Zhu & Hongyun Si & Xu He, 2021. "Does Low-Carbon City Construction Improve Total Factor Productivity? Evidence from a Quasi-Natural Experiment in China," IJERPH, MDPI, vol. 18(22), pages 1-21, November.
    20. Zhu, Bingcheng & Huang, Hongyun & Liu, Ying & Zhang, Ning, 2025. "Twin goals, one policy: Cost-effective collaborative abatement via new energy cities," Energy Economics, Elsevier, vol. 151(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecofin:v:81:y:2026:i:c:s1062940825001883. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620163 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.