New energy policy and green technology innovation of new energy enterprises: Evidence from China

The New Energy Demonstration City Policy (NEDCP) is a green development strategy with Chinese characteristics, while new energy enterprises (NEEs) are micro-foundations for quick energy transition to new energy resources. A difference-in-difference-in-differences (DDD) model and green patent application data for A-share listed NEEs in Shanghai and Shenzhen from 2011 to 2019 are used to investigate the effect of NEDCP on the green technology innovation (GTI) of NEEs. We find that the NEDCP can significantly increase the GTI of NEEs. This promotional effect is mainly manifested in green invention patents, which include energy-saving and alternative energy patents. The NEDCP increases the GTI of non-state-owned companies and companies in regions focusing on the development of photovoltaic and biomass energy industries. The NEDCP promotes the GTI of NEEs by alleviating external financing constraints, strengthening internal incentives, and creating a favorable market environment. These findings are important for China to strengthen the GTI ability of enterprises through new energy policies, and can provide references for other developing economies.