IDEAS home Printed from https://ideas.repec.org/a/plo/pone00/0277879.html

Can the low-carbon city pilot policy promote firms’ low-carbon innovation: Evidence from China

Author

Listed:
  • Ge Yang

Abstract

The low-carbon city pilot policy is an environmental regulation aimed at reducing carbon emissions at the municipal level. Previous research mostly focused on evaluating its environmental performance and discovered it could enhance pilot cities’ low-carbon innovation. However, the effects of the low-carbon city pilot policy on firm-level low-carbon innovation and their economic impact have yet to be investigated. This research uses a sample of Chinese A-share listed firms and the difference-in-difference method to examine the effect of the low-carbon city pilot policy on firms’ low-carbon innovation. The baseline regression showed that the low-carbon city pilot policy could greatly encourage low-carbon innovation among firms in pilot cities. The mechanism analysis demonstrated that this improvement effect is attained by easing these firms’ financing constraints. According to the heterogeneity analysis, we discovered that state-owned firms and firms situated in pilot zones with municipal secretaries who have larger promotion incentives are more susceptible to this policy. Additionally, the research on this policy’s economic impact revealed that, following its adoption, the market value and comparative advantages of the firms in the pilot areas also increased. The findings of this study have implications for the enhancement and national expansion of low-carbon policies adopted at the city level.

Suggested Citation

  • Ge Yang, 2023. "Can the low-carbon city pilot policy promote firms’ low-carbon innovation: Evidence from China," PLOS ONE, Public Library of Science, vol. 18(1), pages 1-13, January.
    • Handle: RePEc:plo:pone00:0277879
    DOI: 10.1371/journal.pone.0277879
    as

    Download full text from publisher

    File URL: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0277879
    Download Restriction: no
    File URL: https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0277879&type=printable
    Download Restriction: no
    File URL: https://libkey.io/10.1371/journal.pone.0277879?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
    ---><---

    References listed on IDEAS

    as
    1. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February.
    2. Huo, Weidong & Qi, Jie & Yang, Tong & Liu, Jialu & Liu, Miaomiao & Zhou, Ziqi, 2022. "Effects of China's pilot low-carbon city policy on carbon emission reduction: A quasi-natural experiment based on satellite data," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    3. Barasa, Laura & Knoben, Joris & Vermeulen, Patrick & Kimuyu, Peter & Kinyanjui, Bethuel, 2017. "Institutions, resources and innovation in East Africa: A firm level approach," Research Policy, Elsevier, vol. 46(1), pages 280-291.
    4. Charles J. Hadlock & Joshua R. Pierce, 2010. "New Evidence on Measuring Financial Constraints: Moving Beyond the KZ Index," The Review of Financial Studies, Society for Financial Studies, vol. 23(5), pages 1909-1940.
    5. Pan, An & Zhang, Wenna & Shi, Xunpeng & Dai, Ling, 2022. "Climate policy and low-carbon innovation: Evidence from low-carbon city pilots in China," Energy Economics, Elsevier, vol. 112(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhang, Zhi Min & Yu, Chengzheng & Deng, Yang, 2025. "The Impact of Policy-Driven Carbon Emission Outsourcing: An Empirical Analysis of Green Innovation and Pollution Transfer Mechanisms," 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO 360768, Agricultural and Applied Economics Association.

    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. Jianfu Shen & Frederik Pretorius & Xin Li, 2019. "Does Joint Bidding Reduce Competition? Evidence from Hong Kong Land Auctions," The Journal of Real Estate Finance and Economics, Springer, vol. 58(1), pages 111-132, January.
    2. Ren, Yi-Shuai & Liu, Pei-Zhi & Klein, Tony & Sheenan, Lisa, 2024. "Does the low-carbon pilot cities policy make a difference to the carbon intensity reduction?," Journal of Economic Behavior & Organization, Elsevier, vol. 217(C), pages 227-239.
    3. Borui Guo & Xiaoxia Huang, 2023. "Role of Digital Transformation on Carbon Performance: Evidence from Firm-Level Analysis in China," Sustainability, MDPI, vol. 15(18), pages 1-18, September.
    4. Jiang, Yong & Ding, Xiao & Ren, Yi-Shuai & Kong, Xiaolin & Baltas, Konstantinos, 2024. "Low-carbon city pilot policy and green investors entry," Finance Research Letters, Elsevier, vol. 64(C).
    5. Zhou, Fengxiu & Chen, Ming & Lee, Chien-Chiang, 2025. "Impact of digital climate governance on carbon neutrality in China: A framework for carbon technological progress," Technology in Society, Elsevier, vol. 83(C).
    6. Maihaiti, Guzailinuer & Hunjra, Ahmed Imran & Alharbi, Samar S. & Zhao, Shikuan, 2025. "Climate-resilient cities for green innovation in enterprises: New perspective based on Fintech," International Review of Economics & Finance, Elsevier, vol. 101(C).
    7. 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.
    8. Lee, Chien-Chiang & Feng, Yi & Peng, Diyun, 2022. "A green path towards sustainable development: The impact of low-carbon city pilot on energy transition," Energy Economics, Elsevier, vol. 115(C).
    9. Du, Lei & Yang, Kening, 2025. "Does institutional change during the green transition influence low-carbon innovation? Evidence from China's Low-Carbon City Project," Technovation, Elsevier, vol. 145(C).
    10. Jiang, Pengcheng & Jiang, Hongli & Wu, Jiahui, 2022. "Is inhibition of financialization the sub-effect of the green credit policy? Evidence from China," Finance Research Letters, Elsevier, vol. 47(PB).
    11. Harrison Hong & Ilan Kremer & Jeffrey D. Kubik & Jianping Mei & Michael Moses, 2015. "Ordering, revenue and anchoring in art auctions," RAND Journal of Economics, RAND Corporation, vol. 46(1), pages 186-216, March.
    12. Raúl Junior Sandoval-Gómez & Jesús Antonio Álvarez-Cedillo & Edgar Ivan Castellanos-Sanchez & Teodoro Álvarez-Sánchez & Rebeca Perez-Garcia, 2023. "Development of a technological innovation and social entrepreneurship training program to generate services in a Mexican public entity," Eastern-European Journal of Enterprise Technologies, PC TECHNOLOGY CENTER, vol. 6(13 (126)), pages 74-87, December.
    13. Yuegang Song & Songlin Jin & Zhenhui Li, 2022. "Venture Capital and Chinese Firms’ Technological Innovation Capability: Effective Evaluation and Mechanism Verification," Sustainability, MDPI, vol. 14(16), pages 1-20, August.
    14. Angrisani, Marco & Atella, Vincenzo & Brunetti, Marianna, 2018. "Public health insurance and household portfolio Choices: Unravelling financial “Side Effects” of Medicare," Journal of Banking & Finance, Elsevier, vol. 93(C), pages 198-212.
    15. Scott A. Imberman, 2011. "Achievement and Behavior in Charter Schools: Drawing a More Complete Picture," The Review of Economics and Statistics, MIT Press, vol. 93(2), pages 416-435, May.
    16. Cao, Chunfang & Li, Xiaoyang & Xia, Changyuan, 2021. "The complicit role of local government authorities in corporate bribery: Evidence from a tax collection reform in China," China Economic Review, Elsevier, vol. 65(C).
    17. Alderson, Michael J. & Betker, Brian L. & Halford, Joseph T., 2021. "Fictitious dividend cuts in the CRSP data," Journal of Corporate Finance, Elsevier, vol. 71(C).
    18. Gabrielle Wills, 2016. "Principal leadership changes in South Africa: Investigating their consequences for school performance," Working Papers 01/2016, Stellenbosch University, Department of Economics.
    19. Dwibedy, Punyashlok, 2022. "Informal competition and product innovation decisions of new ventures and incumbents across developing and transitioning countries," Journal of Business Venturing Insights, Elsevier, vol. 17(C).
    20. Ming Yuan & Jingya Dang & Yujie Hong & Di Gao & Ziyi Xu, 2024. "The Impact of Supply Chain Network Centrality on Sustainable Mergers and Acquisitions: Evidence from China," Sustainability, MDPI, vol. 16(19), pages 1-24, September.

    More about this item

    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:plo:pone00:0277879. 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: plosone (email available below). General contact details of provider: https://journals.plos.org/plosone/ .

    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.