Can low altitude economy development bring economic and environmental dividends? --evidence from Chinese cities

Despite the promising development of the low-altitude economy, its economic and environmental effects remain largely unexplored. This study investigates the effects of a low-altitude economy on economic growth and environmental protection and its mechanisms. Based on the panel data of 282 Chinese cities from 2012 to 2022, a synthetic difference-in-difference model and a causal mediator model are adopted to empirically test the effects of the low-altitude economy on total factor productivity and carbon emissions and its mechanisms. The findings indicate that (1) low-altitude economy enhances the city's total factor productivity while adding to the carbon emission intensity. (2) The low-altitude economy primarily drives economic growth through mechanisms such as technological innovation, resource allocation, and industrial upgrading. (3) The low-altitude economy influences carbon emissions by utilizing mechanisms related to energy efficiency and energy structure. Due to its reliance on fossil fuels, the low-altitude economy significantly offsets the contribution of energy efficiency enhancement to emission reduction. (4) Heterogeneity analysis reveals that the low-altitude economy exerts a more significant effect on plain regions, while its effect is more pronounced in regions with both high and low road network density.