Low Carbon City Pilot Policy and Corporate Innovation

Abstract

The "Double Carbon" target cannot be achieved without energy saving and carbon reduction in urban units, and corporate innovation is indispensable for cities to achieve energy saving and carbon reduction. Based on the data of Chinese A-share firms listed on Shanghai and Shen Stock Exchange over the period of 2007–2020, this paper explores the impact of low-carbon city pilot policies on enterprise innovation using the DDD method, and further refines the substantive and strategic aspects of the impact on enterprise innovation, and explores the heterogeneity of enterprise ownership nature and size. The study finds that, first, the pilot low-carbon city policy significantly promotes corporate innovation and has a slightly higher positive incentive effect on substantive innovation than strategic innovation. Second, non-state corporations and large-scale corporations tend to enhance substantive innovation while state-owned corporations and small-scale corporations tend to engage in strategic innovation activities as a result of the pilot policy.