Can the Circular Economy Demonstration Policy Enhance the Green Innovation Level? A Quasi-Natural Experiment from China

Yongchao Wu, Xinyuan Wei, Yanan Liu and Huilong Li ()
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Yongchao Wu: College of Humanities & Social Development, Northwest A&F University, Yangling 712100, China
Xinyuan Wei: Department of Emergency Management, Party School of Guangdong Provincial Committee of CPC, Guangdong Institute of Public Administration, Guangzhou 510800, China
Yanan Liu: Tourism & Management Department, Yangling Vocational and Technical College, Yangling 712199, China
Huilong Li: School of Public Administration, South China University of Technology, Guangzhou 510641, China

Sustainability, 2024, vol. 16, issue 8, 1-17

Abstract: Although both circular economy and green innovation (GI) have received increasing research attention, little is known about their relationship. Based on quasi-natural experimental analysis, this study explored the impact and mechanism of the National Circular Economy Demonstration City (NCEDC) policy on GI in China and adopted a difference-in-difference (DID) model using the data of 265 cities in China from 2004 to 2018. The results show that the NCEDC policy has significantly improved the cities’ GI level, which can be achieved through industrial structure upgrading and innovation R&D investment effect, and has a stronger performance in eastern cities and lower administrative level cities. Our findings not only present novel evidence on the relationship between the circular economy and GI, but also offer valuable insights for advancing policy pilot initiatives in the field of environmental management.

Keywords: circular economy; green innovation; policy pilot; city environment; quasi-natural experiment (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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