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Does place-based policy encourage energy efficiency? Evidence from development zones in China

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  • Nie, Liang
  • Nie, Cheng

Abstract

Determining whether the place-based policy can spur the economy on its own to accomplish production growth and energy conservation at the same time is crucial to ensuring China meets its “dual carbon” targets in the post-epidemic era. This study investigates how China's establishment of national development zones (DZs)—a model place-based policy—affects energy efficiency at the macro-city and micro-enterprise levels using the difference-in-differences approach. Baseline studies show that DZs significantly improve both China's urban energy efficiency and the energy efficiency of the firms that operate there. Mechanism tests demonstrate that DZs increase energy efficiency through the effects of environmental regulation, technical innovation, and policy tilt. Further research indicates that the efficiency-enhancing benefits of DZs may also be enjoyed by non-DZ enterprises operating in DZ cities as well as those engaged in the direct upstream and downstream sectors of DZ enterprises. Our study has significant policy implications, allowing China to rationally and scientifically support the establishment of DZs in pursuit of the country's transition to a low-carbon economy.

Suggested Citation

  • Nie, Liang & Nie, Cheng, 2025. "Does place-based policy encourage energy efficiency? Evidence from development zones in China," Energy Economics, Elsevier, vol. 150(C).
    • Handle: RePEc:eee:eneeco:v:150:y:2025:i:c:s0140988325006577
    DOI: 10.1016/j.eneco.2025.108830
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