Urbanization and low-carbon cities: Evidence from city-county merger in China

Economic high-quality and low-carbon development stand as strategic priorities for urban advancement within the context of dual carbon goals. Administrative territorial adjustments have emerged as a robust instrument in China's urbanization drive over recent decades. Nevertheless, scant attention has been given to its impact on urban low-carbon development. This paper employs a multi-period DID model to investigate the effect of the “City-County Merger” policy (CCMP) on urban carbon emissions, while also exploring potential channels and heterogeneity characteristics. The findings of this study are unequivocal: the implementation of the CCMP has proven to be a potent strategy in effectively curbing urban carbon emissions. This conclusion remains robust after a series of robustness tests. Furthermore, the study identifies certain channels that play a pivotal role in moderating the nexus between the CCMP and urban carbon emissions, including enhancing government intervention, optimizing urban energy structure, and improving urban (green) technology innovation. The heterogeneity analysis shows that CCMP yields heightened effectiveness in small and medium-sized cities, non-resource-based cities, and cities in the eastern and western regions. This study serves to provide nuanced insights, offering both theoretical underpinnings and pragmatic recommendations to propel the effective implementation of the CCMP.