Low-Carbon City Pilot Policy and Corporate Green Innovation: Evidence from Chinese Listed Firms

Environmental policies play an important role in promoting corporate green innovation, yet existing studies often treat such policies as a single exogenous shock and pay limited attention to the institutional context in which firms respond. Using the Low-Carbon City Pilot (LCCP) policy in China as a quasi-natural experiment, this study examines how environmental policies influence corporate green innovation. Based on panel data of Chinese A-share listed firms from 2007 to 2023, a staggered difference-in-differences model is employed to identify the policy effect. The results show that the LCCP policy significantly promotes corporate green innovation and stimulates both substantive and strategic green innovation. From the perspective of institutional logics, capital market time orientation plays an important moderating role: long-term institutional investors strengthen the positive policy effect, while short-term institutional investors weaken it. Mechanism tests further show that the policy promotes green innovation mainly by increasing managerial attention to environmental and low-carbon issues, while its effect on temporal attention allocation is not significant. These findings highlight the importance of institutional contexts and managerial attention in shaping firms’ strategic responses to environmental policies and provide new empirical evidence on how environmental governance policies influence corporate green innovation.