Promoting green technology innovation through policy synergy: Evidence from the dual pilot policy of low-carbon city and innovative city

Yaobin Liu, Weifeng Deng, Huwei Wen and Shuoshuo Li

Economic Analysis and Policy, 2024, vol. 84, issue C, 957-977

Abstract: Green technology innovation (GTI) is the key to overcoming the dilemma between economic development and environmental protection, requiring integrates environmental regulatory policies and innovation incentive policies to counteract its double externalities. This study examined the effects of the dual pilot policy (DPP) of low-carbon city pilot policy (LCCPP) and innovative city pilot policy (ICPP) on GTI based on panel data from 281 prefecture-level cities in China spanning 2007 to 2022. We found that DPP significantly improves both substantive green technology innovation (SUGTI) and strategic green technology innovations (STGTI), with a more pronounced effect identified on STGTI. LCCPP and ICPP demonstrate a policy-synergistic effect and a more sustainable and powerful influence compared to the single pilot policy of LCCPP or ICPP. Mechanism analysis reveals that DPP corrects the positive externalities of innovative knowledge by improving innovation subsidies, independent innovation capabilities, and innovation efficiency. DPP also corrects the negative externalities of environmental pollution by promoting environmental services, industrial transformation, and cleaner production. This effect of DPP on GTI appears insignificant in western cities, cities with low industry agglomeration, cities with abundant resource, and cities with low environmental awareness. Moreover, DPP engenders a demonstration effect for neighboring cities in their GTI. Our findings reveal that intensifying the policy synergy effects of LCCPP and ICPP can more efficiently and sustainably promote SUGTI and STGTI. To maximize the synergistic effects of LCCPP and ICPP, it is essential to strength the green effect of LCCPP and the innovative effect of ICPP, integrating various policy tools to complement and reinforce each other.

Keywords: Low-carbon city pilot policy; Innovative city pilot policy; Policy synergy; Substantive and strategic green technology innovation; Double externalities; Quasi-natural experiments (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:84:y:2024:i:c:p:957-977

DOI: 10.1016/j.eap.2024.10.005

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