Low-carbon cities pilot and industrial structure upgrading: enabling or negative? Evidence from a quasi-natural experiment in China

Abstract

The enhancement of industrial structural refinement stands as a pivotal approach to harmonize high-quality economic development and environmental preservation. In this study, we seek to assess the impact of low-carbon city pilot programs on the upgrading of industrial structure. Leveraging panel data encompassing 283 prefecture-level cities in China from 2006 to 2019, this study undertakes an empirical test employing the time-varying difference in difference (DID) methodology. We further delve into an examination of the specific mechanisms and heterogeneity of effects. The findings are summarized as follows: (1) the low-carbon cities pilot significantly promoted the supererogation of industrial structure, but did not promote the rationalization of industrial structure. This observation remains valid even after undergoing a battery of robustness tests. (2) The pilot propels the upgrading of industrial structure by fostering green technology innovation and diminishing resource dependence. Local government support positively moderates the effect of green technology innovation on industrial structure supererogation, while negatively moderating the effect of green technology innovation on industrial structure rationalization. Further tests reveal that local government support can positively moderate the mediating effect of green technology innovation. (3) The policy effect of the pilot is more conspicuous in the eastern region, which is mainly achieved via increasing the intensity of green technology innovation and reducing resource dependence. (4) The pilot exhibits a more pronounced driving effect on the industrial structure of high-level cities, primarily through the promotion of green technology innovation. These findings not only provide empirical evidence for the industry-driven effect of low-carbon cities, enriching the effect assessment research of low-carbon city pilot policies from the theoretical level, but also furnish policy reference for realizing the green and high-quality economic development of low-carbon cities from the practical perspective.