1. Introduction
China’s economic development has entered a new normal, but the excessive growth of its carbon emissions has restricted its long-term economic development. To fulfill energy conservation and emission reduction goals while realizing sustainable development, the pilot construction of low-carbon cities came into being. The Chinese government follows the logic of “from point to surface”. Under the authorization of the central government, local governments independently carry out low-carbon city pilot work, and the central government absorbs the best of them into the policies formulated by the central government, and then promotes them nationwide. The first batch of low-carbon pilot projects were launched in 2010. After several years of development, 6 provinces and 81 cities were included in this project. Each pilot attaches great importance to low-carbon development planning and introduced relevant policies based on objective factors, such as resource endowments and industrial structure, with an emphasis on a coordinated economic development and environmental optimization. The construction of low-carbon cities requires an urgent improvement of the existing resource allocation mechanism and a transformation and upgrading of high-energy-consuming industries. As an important entity that gives full play to the role of the market in improving energy efficiency and optimizing energy structure, the innovation of enterprises in the field of green technology plays a key role in transforming economic models. In 2020, low-carbon pilot works were launched nationwide. As a result, the performance of environmental regulations, such as low-carbon city pilot policies, began to attract research attention.
Many researchers at home and abroad have explored the impact of environmental regulation policies on green technology innovation. Most of these studies have analyzed the impact of environmental regulations on green technology innovation based on the “Porter hypothesis.” Given the objective differences in their samples and measurement methods, these studies have proposed three main views. First, environmental regulations inhibit green technological innovation. Some scholars believe that the environmental regulations that increase the cost of pollution control has led to an overall decline in industrial performance [
1], squeezed research and development (R&D) investments, and inhibited corporate innovation in the field of green technology [
2,
3]. For instance, Chintrakarn [
4] pointed out that environmental regulations have not promoted the US manufacturing sector. As efficiency is improved, Zhang [
5] found that regulated companies mainly purchase new pollution control equipment to reach clean production standards instead of increasing the intensity of their R&D and innovation. Second, environmental regulations promote green technological innovation. Many scholars [
6,
7,
8] find that the “innovation compensation” effect stimulated by environmental regulation policies effectively promotes the innovation of enterprises in the field of green technology. Jing [
9] argued that reasonable environmental regulation promotes the low-carbon transformation of industrial enterprises, Jia [
10] and Wang [
11] pointed out that strengthening environmental regulations can promote green technology innovation, and Qi [
12] found that pilot emissions trading policies promote the green innovation activities of enterprises. Third, the impact of environmental regulations on green technology innovation is uncertain. Some studies either show that such relationship is inconsistent [
13,
14] or point out a non-linear relationship [
15,
16], and due to differences in their samples and indicators, these studies produce varying conclusions. Yu [
17] examined resource-based companies and found an inverted U-shaped relationship between environmental regulations and corporate green technology innovation performance. Using inter-provincial data, Zhang [
18] found that the impact of environmental regulations on green technological innovation has a U-shaped characteristic of initially restraining and then promoting. Wang [
19] conducted an empirical analysis by using the green patent data of Chinese listed companies and confirmed the aforementioned U-shaped relationship.
In low-carbon cities, low-carbon city pilot policies are used as comprehensive environmental regulation tools, and the effect of their implementation has received much research attention. Many scholars have adopted synthetic control methods or conducted a difference-in-differences (DID) to evaluate the performance of pilot policies and found that the promotion of these policies is conducive to reducing carbon emissions [
20,
21], decreasing energy consumption [
22], and optimizing industrial structure [
23,
24,
25]. Song [
26] found that carbon city construction effectively reduces urban air pollution by reducing corporate emissions and upgrading the industrial structure. Zhang [
27] found that low-carbon cities reduce carbon emissions by reducing power consumption and improving technological innovation. Many scholars have also examined the performance of low-carbon cities in the development of a green economy. Wang [
28] found that low-carbon pilot policies effectively promote the growth of green economies in pilot cities through the causal inference of progressive DID, whereas She [
29] further pointed out that low-carbon pilot policies indirectly improve the green total factor productivity of pilot cities by promoting urban innovation and industrial upgrading.
In sum, while previous studies have analyzed the impact of environmental regulations on green technology innovation, they have mainly focused on a single environmental policy as their test object, whereas their evaluation and examination of the pilot policies in low-carbon cities mostly relied on energy consumption as indicators. Although these indicators directly reflect the low-carbon achievements of pilot cities, they are unable to reflect the goal of urban green development. Although some scholars [
28,
29] have gradually paid attention to this area in recent years, only few have focused on the impact of low-carbon city construction on the green technological innovation of enterprises. Moreover, the micro-mechanism of these policies also needs to be tested. The main innovations of this study are as follows: (1) based on the micro perspective of enterprises, we applied a multi-period DID method to quantitatively evaluate low-carbon city pilot policies, explore their impact on green technology innovation, break through the original macro research paradigm, and expand the policy-related research; (2) on the basis of a benchmark analysis, we further tested the impact of regional heterogeneity and industry carbon intensity on the implementation of low-carbon city pilot policies and explored the direction of these policies; and (3) from the perspective of alleviating financing constraints, we analyzed the impact mechanism of low-carbon city pilot policies on corporate green technological innovation, and offered empirical support for the follow-up implementation and promotion of policies.
2. Research Hypotheses
As city-level environmental regulations, low-carbon city pilot policies are not strongly binding. The central government has not set specific targets for local governments in pilot cities, such as for carbon emissions and emission standards. Each pilot city has received many policy incentives and can gradually implement low-carbon work according to its regional development stage and industrial structure characteristics. The introduction of various green financial policies, such as tax incentives and government subsidies, can also guide enterprises to innovate in the field of green technology and control their greenhouse gas emissions. These pilot cities show a certain degree of freedom, but in terms of talent quality, technical foundation, market environment, and geographical location, there are great differences among the pilot areas, local governments also show certain differences in their enthusiasm and innovation in implementing low-carbon policies. These differences in turn influence the progress of related work and the effect of the final implementation. Therefore, in the context of weakly binding policies, whether the establishment of low-carbon cities can promote enterprise innovation in the field of green technology should be tested.
2.1. Low-Carbon City Pilot Policies and Corporate Green Technology Innovation
Low-carbon city pilot policies are mainly implemented by reducing energy consumption and emissions in the production process, improving energy efficiency, and promoting the low-carbon transformation of industries. In this process, enterprises as the main innovation players play a vital role. The green production technology developed via scientific research innovation is key to the implementation of relevant policies. On the one hand, environmental regulations will increase the pollution control and emission reduction costs of enterprises and affect their market competitiveness. They may squeeze out these enterprises’ investment in technology R&D, change their financial investment preferences, and drive them away from reality [
30]. On the other hand, as pointed out by Porter [
31], environmental protection, and economic development are not mutually opposed. Reasonable environmental regulations trigger innovation compensation effects, stimulate corporate green technology innovation, and produce benefits that can make up for the environmental costs of enterprises. Following the above discussion, Hypothesis 1 is proposed as follows.
Hypothesis 1 (H1). Low-carbon city pilot policies are conducive to corporate green technological innovation.
2.2. Low-Carbon City Pilot Policies and Regional Heterogeneity
Prefecture-level cities in different regions often show huge differences in their market environments, resource endowments, traffic conditions, and talent supply, all of which affect their advancement of low-carbon pilot work. Therefore, some regional heterogeneity may be observed in the impact of low-carbon city pilot policies on corporate green technological innovation. Eastern cities in China are generally believed to have more obvious advantages in their accumulation of low-carbon technologies and innovative talents and in their construction of social networks [
28,
32]. Meanwhile, central and western cities in China not only have weak economic foundation, but also accommodate many energy-consuming and high-pollution enterprises, which lead to severe resource and environmental problems that require an improvement of the overall innovation environment [
33]. However, previous studies also show that due to the high population concentration and large economic scale of eastern cities, their carbon lock-in effect is often stronger than that of western cities, and quickly realizing the effectiveness of low-carbon pilot policies is difficult [
27]. Although many studies have examined the regional heterogeneity of low-carbon pilot policies [
34], most of them have focused on urban technological innovation and carbon emissions [
35]. Therefore, the impact of low-carbon pilot policies on the green technology innovation of enterprises across different regions should be examined. From the above discussion, Hypothesis 2 is proposed as follows.
Hypothesis 2 (H2). Low-carbon city pilot policies are more conducive to corporate green technological innovation in eastern cities than in central and western cities.
2.3. Low-Carbon City Pilot Policies and Industry Carbon Intensity
Whether companies are in high- or low-carbon emission industries, they will be affected by environmental regulations, but low-carbon emission industries have strong innovation capabilities, low environmental pollution, and high technology accumulation. Under the regulation of low-carbon city policies, high- and low-carbon companies show significant differences in their green technology innovation. Qi [
12] found that compared with clean enterprises, the pilot emission trading policy has a more significant promotion effect on the green technology innovation of polluting enterprises. Shen [
36] pointed out that, for different industries, environmental policies have a heterogeneous effect on the green factor productivity of enterprises. According to the policies issued by pilot cities, high-carbon emission industries are often subject to mandatory constraints due to their high-energy consumption and emissions and are strictly restricted in terms of their production capacity, emissions, and energy consumption. These restrictions not only control the entry of new enterprises and the implementation of new projects but also significantly increase the cost of environmental management. To avoid being eliminated, high-carbon emission industries will increase their investments in scientific research and improve their market competitiveness through green technology innovation. In contrast, low-carbon emission industries have received much policy support, and the cost of pollution control has not increased significantly. In addition, they have invariably attached great importance to green technology innovation. Based on the above discussion, Hypothesis 3 is proposed as follows.
Hypothesis 3 (H3). Low-carbon city policies are more conducive to green technology innovation in high-carbon emission industries than in low-carbon emission industries.
2.4. Low-Carbon City Pilot Policies and Financing Constraints
Innovation in the field of green technology has the characteristics of high uncertainty, large capital needs, and strong externalities. Many companies, especially listed ones, often face great financing constraints. Under the pressure of profitability, these firms pay more attention to short-term benefits, focus on their current financial statements, and lack the enthusiasm for long-term investment, which inhibit them from developing independent R&D and collaborative innovation [
37,
38]. To ease the constraints in accumulating scientific research funds for enterprises and optimizing the allocation of resources among industries, low-carbon pilot cities have introduced green finance policies and provided financial support through tax incentives, government subsidies, and special funds. Many studies have pointed out that government subsidies can alleviate financing constraints [
39,
40] and support enterprises in their pursuit of green innovation activities [
41], tax incentives reduce the financial pressure faced by these enterprises to a certain extent, promote their scientific and technological research, and improve their technology level [
42,
43,
44]. However, some scholars believe that government subsidies may squeeze out enterprise R&D investment [
45], and the subsequently triggered rent-seeking activities will reduce the incentive effect of these subsidies [
46]. From the perspective of government subsidies and tax incentives, this study examines whether financing constraints can be eased to promote the implementation of low-carbon pilot policies to promote corporate green technology innovation while providing data support for future low-carbon pilot work. Based on the above discussion, Hypothesis 4 is proposed as follows.
Hypothesis 4 (H4). To implement a low-carbon city pilot policy, enterprises should promote green technological innovation by alleviating financing constraints.
5. Discussion
To cope with climate change and achieve sustainable development, green and low-carbon economy has become a new focus in China. However, the industrial sector still dominates the industrial structure of most cities in China, and this sector’s energy structure is mainly concentrated in high-carbon energy. Many challenges are involved in the process of low-carbon development, which necessitate the market to play its key role in stimulating the green innovation vitality of enterprises. We constructed a multi-period double difference model to study the impact of the low-carbon city pilot policy on the green technology innovation of enterprises. Our research contributes to the literature in two important aspects. First, we expand the relevant literature on the low-carbon city pilot policy. Previous studies have often focused on the industry or city level [
22,
23,
24,
25,
26,
27,
28] and tested industrial structure [
23,
24,
25], carbon emissions [
22,
27], and other indicators yet largely ignored the impact of low-carbon city construction from the perspective of enterprises. Although some scholars [
34,
47] have examined this aspect in recent years, most of the sample data included only the first two batches of pilot cities. We used multi-phase DID to include three batches of pilot cities within our empirical scope and found that the pilot policy of low-carbon cities promotes the green technology innovation of enterprises and increases the number and proportion of their green patent applications, which may be ascribed to the emphasis of this policy on industrial sectors and its weak constraints. Enterprises are encouraged by innovation and avoid crowding out their R&D investments due to high pollution control cost. Second, we clarified the role and impact mechanism of low-carbon pilot policy, and found that the introduction of the pilot policy was highly conducive to the green technology innovation of enterprises in eastern cities and high carbon emission industries. By further analyzing the mechanism of the pilot policy in easing financing constraints, we found that tax incentives and government subsidies help this policy play its role in green technology innovation. Moreover, tax preference has a stronger promotion effect compared with government subsidies probably because the former exerts its effect through the market mechanism. In addition, enterprises have a strong subjective initiative and can be adjust themselves in time according to their actual situation. With its strong planning, government subsidies may blindly subsidize enterprises with poor performance and blindly construct high-tech projects.
We preliminarily analyzed the role of pilot policies in low-carbon cities in promoting the green technology innovation of enterprises. However, given that pilot policies themselves are still in the process of promotion, some limitations need to be monitored and analyzed. We used a multi-period double difference method to test the green technology innovation effect of the pilot policy. However, the third batch of the low-carbon city pilot work was carried out within a short period. In this case, considering the policy lag, corporate data covering a longer sample period are required for subsequent verification. In our analysis of the mechanism for alleviating financing constraints, our selected government subsidy indicators were not subdivided into scientific and technological innovation projects, could not fully reflect the incentive effects, and require further testing by mining relevant data. The financial constraints and investment risks of enterprises in green technological innovation are issues that need to be solved urgently in the development of low-carbon cities. Follow-up studies can start from the circular business model [
52,
53], analyze the effectiveness of circular economy in reducing resource consumption, waste and emissions, explore the feasibility of building a circular economy development model in high-carbon industries, and expand relevant research on low-carbon city pilot policies.
6. Conclusions and Suggestions
Based on a sample of A-share listed companies from 2005 to 2019, we analyzed the impact of the low-carbon city pilot policy on the green technology innovation of enterprises by using a multi-period double difference model. Based on the model results, we conducted a heterogeneity analysis, explored the direction of the pilot policy, and analyzed its impact mechanism to provide empirical basis for the follow-up implementation and promotion of this pilot policy. We obtained three key findings. First, the pilot policy of the low-carbon city promoted the innovation of enterprises in the field of green technology and significantly increased their number and proportion of green patent applications, especially green invention patents. Second, our heterogeneity analysis revealed that compared with central and western cities, the pilot policy was more conducive to the green technology innovation of enterprises in eastern cities. Meanwhile, compared with low-carbon emission industries, the pilot policy had a bigger role in promoting green innovation in high-carbon emission industries. Third, our mechanism analysis identified tax incentives and government subsidies as important fiscal and tax tools for fulfilling the roles of the low-carbon city pilot policy. By easing their financing constraints, enterprises could effectively promote green technology innovation. Tax incentives play an important role in promoting the green technology innovation of enterprises and mainly focus on green invention patents.
To further promote the development of a low-carbon economy and achieve a comprehensive green transformation of economic and social development, we propose the following countermeasures and suggestions: (1) actively promote the implementation and diffusion of pilot policies of low-carbon cities. The low-carbon pilot policy can promote the green technology innovation of enterprises, which is in line with China’s current development situation and meets the needs of social development. To develop a low-carbon economy, we should actively promote the pilot work. On the one hand, we should sort out the achievements and shortcomings of the three batches of low-carbon city pilot work, summarize the work experience, and form typical cases to promote. On the other hand, according to their regional economic structure and recent development, we should gradually expand the scope of pilot cities and pursue carbon peak and carbon neutralization. (2) Carry out the pilot work of low-carbon cities according to local conditions. Based on the objective conditions of regions and industries, we should scientifically formulate an implementation plan of the pilot work to effectively control the amount and intensity of carbon emissions and gradually establish a pilot evaluation and retirement mechanism to supervise and restrict low-carbon pilot cities. (3) Attach importance to guiding the transformation and upgrading of high-carbon industries. Promoting the low-carbon development of high-carbon industries is an important task in the low-carbon pilot work. The pilot government can actively strive to levy carbon tax in the form of local tax. Through the collection of carbon tax and the establishment of green development fund, the government can guide and encourage high-carbon industries to promote the technological transformation and upgrading of traditional industries, and carry out green technology innovation, so as to give full play to the market main role of enterprises in developing low-carbon industries and developing clean technologies. At the same time, the green monitoring and evaluation system needs to be constructed, and the information of enterprise environmental violations should be included in the credit information. This will provide the basis for the government to implement fiscal and tax policies, so that the government can give full play to the role of tax incentives and government subsidies, ease the financing constraints of related enterprises, promote green technology innovation, and gradually optimize the regional industrial structure.