Can the Energy-Consuming Right Trading PolicyImprove Urban Green Technology InnovationCapacity? Evidence from China

Green technology innovation plays an important role in achieving high-quality economic development in China. It is of great theoretical value and practical significance to study the effect of the Energy-consuming Right Trading Policy (ERTP) on green technology innovation. Based on the panel data of 279 cities in China from 2006 to 2020, this paper analyzes the effect of the ERTR on urban green technology innovation capacity (GTIC) by using the difference-in-differences (DID) model. The study shows that the ERTR can significantly improve urban GTIC and validates the “Weak Porter Hypothesis”. After a series of robustness tests, this conclusion still holds. Furthermore, the mechanism analysis shows that the ERTP can promote urban GTIC through industrial structure upgrading. In addition, the heterogeneity analysis indicates that the ERTR can significantly improve the GTIC of eastern cities and non-resource cities. This paper fills the gap of related studies and provides an important reference for improving the ERTP.