What drives the uptake of ecologically civilized patents in China? New evidence from firm-level patent data with DID approach

Developing Ecologically Civilized Cities (ECCs) through environmental interventions is critical for promoting green technologies and building sustainable ecosystems. To explore how ECCs drive green technology adoption, we use data from listed Chinese companies from 2010 to 2019. By deploying a non-static Difference-in-Difference (DID) technique, we find: (1) ECCs significantly enhance firm-level green technology adoption, increasing clean technology uptake by 5.92% in pilot cities. However, current policies are more effective for non-state-owned enterprises (non-SOEs) and firms closer to the technological frontier, falling short in supporting state-owned enterprises (SOEs) and technologically distant firms, highlighting a policy void in targeted incentives. (2) Firms' green innovation responses to ECCs exhibit significant heterogeneity, with non-SOEs, non-tech-intensive firms, and firms with smaller technological gaps showing stronger innovation. (3) ECCs promote green technology adoption through financial subsidies and tax incentives (policy effects) and reduced institutional transaction costs and improved financing conditions (cost effects). Our study not only validates the effectiveness of ECC policies but also critically reveals their limitations in addressing firm heterogeneity and regional disparities. We propose targeted subsidies, regional innovation hubs, streamlined transaction costs, and hybrid policy models to optimize ECCs, fostering equitable and sustainable green innovation and providing a new framework for China's Sustainable Development Goals.