The influence of China’s low-carbon city pilot policy on the green innovation of enterprises in the context of carbon neutrality

China’s low-carbon city pilot policy (LCCPP) plays a crucial role in reducing carbon pollution and promoting green development. It stimulates enterprises’ green innovation (GI), such as through the promotion of circular carbon technologies and energy-efficient practices. However, a negative trend has emerged, wherein enterprises are increasingly focusing on low-end innovation to secure subsidies or comply with regulatory requirements. Despite this situation, few studies have explored the mechanisms driving enterprises’ adoption of either substantial or superficial GI within the LCCPP framework. This study uses data from Chinese A-share listed companies (2007–2022) and employed a difference-in-differences model to analyze the impact of the LCCPP on GI. Results show that while the LCCPP significantly promotes substantive GI, its effect on strategic GI is minimal. The policy primarily promotes substantive GI by increasing public environmental awareness, with managerial myopia moderating this relationship. Heterogeneity analysis reveals that the LCCPP boosts GI in technology-intensive enterprises and those with a high fixed asset ratio. However, it has limited impact on labor-intensive enterprises and those with a low fixed asset ratio. These findings contribute to the existing body of literature on low-carbon pilot policies and offer policy recommendations for enhancing innovation incentives in the context of carbon neutrality.