Low carbon cities pilot, executive environmental cognition, and enterprise green technology innovation

Abstract

AbstractThe potential of the low carbon city pilot (LCCP) to foster enterprise green technology innovation (EGTI) is contingent upon enhancing the quality of urban development, improving the ecological environment, and ultimately achieving the objective of “double carbon” reduction. Due to this, this article uses data from Chinese A‐share listed businesses in Shanghai and Shenzhen from 2009 to 2021 to investigate the effect of LCCP on EGTI. It is found that LCCP significantly contributes to EGTI, and a number of robustness tests later, this finding remains valid. The mechanism analysis confirms that LCCP promotes EGTI by weakening economic policy uncertainty and increasing firms' R&D investment. Through the heterogeneity analysis, this paper explores that optimizing corporate staff structure, increasing media attention, and increasing government subsidies are effective paths to promote EGTI development with LCCP. The moderating effect confirms that executives' environmental cognition plays a positive moderating role between LCCP and EGTI. This paper enriches the related research on the evaluation of the effect of low‐carbon pilots and provides important policy insights for promoting the development of corporate green transformation.