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Evaluating the Impact of Low-Carbon Urban Policy on Corporate Green Innovation—Evidence from China’s National Low-Carbon City Strategy Program

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  • Xingneng Xia

    (School of Public Policy and Administration, Xi’an Jiaotong University, Xi’an 710049, China)

  • Xuezhao Chen

    (School of Public Policy and Administration, Xi’an Jiaotong University, Xi’an 710049, China)

  • Qinqin Chen

    (School of Public Policy and Administration, Xi’an Jiaotong University, Xi’an 710049, China)

Abstract

Low-carbon urban policy (LCUP) and corporate green innovation are considered crucial strategies and methods for reducing urban carbon emissions, addressing climate change, and promoting urban environmental sustainability. This study constructed a quasi-natural experiment based on the low-carbon city strategy program implemented in China in 2010, utilizing data from Chinese prefecture-level cities and publicly listed companies from 2005 to 2020. Employing a multi-period difference-in-differences (DID) approach, this paper reveals that the establishment of low-carbon model cities effectively fosters green innovation in corporations. Further analysis demonstrates that this promotional effect is particularly significant in non-state-owned enterprises, enterprises with high media attention, those with a high level of digitalization, and enterprises located in cities with high levels of green finance and in the Eastern and Central regions of China. These conclusions withstood a series of robustness tests, confirming their validity. Meanwhile, the examination of policy mechanisms reveals that public environmental awareness, government environmental regulation, and corporate environmental information disclosure are three key policy transmission mechanisms through which LCUP affects corporate green innovation. The findings of this study provide significant empirical insights for addressing climate change and enhancing the sustainable capacity of urban environments.

Suggested Citation

  • Xingneng Xia & Xuezhao Chen & Qinqin Chen, 2024. "Evaluating the Impact of Low-Carbon Urban Policy on Corporate Green Innovation—Evidence from China’s National Low-Carbon City Strategy Program," Sustainability, MDPI, vol. 16(10), pages 1-26, May.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:10:p:4154-:d:1395344
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    References listed on IDEAS

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