Entrepreneurship promotion policies and urban carbon emission efficiency: does environmental concerns matter?

Abstract

To foster economic and social development, many countries have adopted entrepreneurship promotion policies. However, existing research on entrepreneurship promotion policy primarily focuses on its employment incentive effect, while neglecting to examine the underlying impact mechanism and its effect on environmental sustainability. Based on the quasi-natural experiment of China’s National Entrepreneurial Pilot Cities, this paper employs the difference-in-differences model to examine the impact of the National Entrepreneurial Cities pilot policy on urban carbon emission efficiency. The study finds that China’s National Entrepreneurial Cities pilot policy has generally impaired urban carbon emission efficiency, and a series of robustness tests show that the results are robust. National Entrepreneurial Cities pilot policy decreases urban carbon emission efficiency by increasing the proportion of necessity entrepreneurship, inhibiting the upgrading of industrial structure, and increasing overcapacity. The government’s environmental concerns and the public’s environmental concerns play a prominent role in improving the adverse impact of the National Entrepreneurial Cities on carbon emission efficiency and mainly play a significant role in central and western cities, cities with low per capita GDP, cities with high economic growth pressure, and resource-dependent cities. The research of this paper provides a reference for the government to promote entrepreneurship while taking environmental effects into account.