Can Green Location-Oriented Policies Promote Urban Energy Efficiency? --Evidence from Eco-Industrial Demonstration Parks in China

Abstract The enhancement of energy efficiency represents a pivotal step towards the achievement of the objective of energy conservation, emission reduction, and green development. Location-oriented industrial policies oriented towards sustainable development and ecological and environmental protection play a pivotal role in the enhancement of energy use efficiency. This paper employs a sample of 196 Chinese cities from 2005 to 2020 to examine the impact and path of energy efficiency in National Eco-Industrial Demonstration Parks (EIDPs), a representative green location-oriented policy. The analysis employs the time-varying difference-in-differences method (TV-DID). The findings of this study indicate that the EIDPs exerts a considerable influence on urban energy efficiency, with an effect size of 0.5644. This conclusion remains valid following a series of robustness tests, including the parallel trend test, the placebo test, the PSM-DID methodology, the heterogeneity treatment effect test, the exclusion of other policy interferences, and the sample data screening. The mechanism of action test demonstrated that EIDPs exert a significant impact on urban energy efficiency through three transmission paths: enhancing environmental regulation, promoting green technological innovation, and upgrading industrial structure. The heterogeneity test demonstrated that EIDPs can play a significant role in promoting energy efficiency in cities that are not old industrial bases, non-resource-based, and where the demonstration parks have already been created. Nevertheless, this role is less discernible in cities that are established industrial centers, resource-based cities, and cities where the demonstration parks are currently being established.