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Does the combination of low-carbon and innovative policies promote the high-quality development of enterprises?—A quasi-natural experiment based on the “dual pilot” of low carbon and innovation cities

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Abstract

Low-carbon and innovative policies have been proven to be effective means of addressing environmental externalities and innovation externalities, and assessing the potential impacts of their combined effects on economic development is an integral part of policy evaluation. Drawing from the quasi-natural experiment concerning innovative and low-carbon cities, we build a time-varying DID model to investigate the economic consequences of combining environmental and innovative policies. By monitoring the listed companies in China’s manufacturing sector from 2009 to 2020, the effects of the excellent creation of “dual-pilot” policies are investigated from the perspective of total factor productivity (TFP). According to the study, combination policies boost total factor productivity and facilitate high-quality development among Chinese enterprises. Robustness tests, such as correcting for time trends, replacing variable measures, and placebo tests, all show that this conclusion remains valid. The mechanism test finds that when environmental and innovation policies are combined, total factor productivity in the business sector is boosted. This is because, among other things, technical innovation and labor distortion both impact businesses’ ability to launch green innovation and optimize the efficiency with which they allocate resources. Further analysis reveals that the combination of policies is more likely to affect critical urban firms, highly polluting firms, and state-owned enterprises (SOEs). The findings provide important insights for further comprehensive roll-out on low-carbon policy and innovative policy combinations for high-quality enterprise development.

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Authors and Affiliations

  1. School of Business, Henan Normal University, Xinxiang, 453007, China

    Fang Zhou

  2. School of Economics, Shanghai University, Shanghai, 200444, China

    Ye Zhao

  3. College of Economics & Management, China Jiliang University, Hangzhou, 310018, China

    Ran Liang

  4. SILC Business School, Shanghai University, Shanghai, 200444, China

    Siwei Zhu

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Zhou, F., Zhao, Y., Liang, R. et al. Does the combination of low-carbon and innovative policies promote the high-quality development of enterprises?—A quasi-natural experiment based on the “dual pilot” of low carbon and innovation cities. Environ Dev Sustain (2024). https://doi.org/10.1007/s10668-024-04979-7

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