The effect and mechanism of new energy demonstration city policies on green innovation of new energy enterprises in China

[Objective] Green innovation is a key driving force for addressing environmental challenges and achieving high-quality development. Studying the impact and mechanism of policies for new energy demonstration cities on green innovation can provide theoretical support and empirical evidence at the enterprise level for the evaluation and optimization of policies in new energy demonstration cities. [Methods] Using the Gini coefficient, Theil index, and spatial Markov chain method, this study revealed the balanced development and spatial-temporal shift characteristics of green innovation in Chinese new energy enterprises from 2008 to 2020. A difference-in-differences model was employed to assess the effects and mechanisms of new energy demonstration city policies on green innovation. [Results] (1) In the research period, inequality in green innovation among Chinese new energy enterprises in the new energy industry gradually increased over time, exhibiting a “Matthew effect”. (2) New energy demonstration city policies significantly enhanced the green innovation of new energy enterprises. Specifically, compared to areas without the implementation of such policies, the green innovation of listed companies in cities with these policies increased by 14%, as supported by a series of robustness tests. (3) The policies achieved the enhancement in green innovation by boosting research and development investments and strengthening environmental regulations. (4) Heterogeneity analysis showed that the impact of new energy demonstration city policies on green innovation was more pronounced for companies with smaller scales and tighter financing constraints. [Conclusion] The implementation of new energy demonstration city policies has a positive influence on promoting green innovation in the new energy industry. The research results provide policy references for the government to promote new energy demonstration city policies and enhance the green innovation of new energy enterprises.