Fiscal policy on energy conservation and emission reduction and environmental protection investment in heavy pollution enterprises: a quasi-natural experiment from China

The development of comprehensive demonstration cities for energy conservation and emission reduction fiscal policies, as a targeted green policy instrument, serves as a critical measure in advancing China’s ‘dual carbon’ goals. Based on data from Chinese A-share listed companies spanning 2006 to 2022, this study employs the establishment of such demonstration cities as a quasi-natural experiment and constructs a staggered difference-in-differences model to systematically examine the impact of these fiscal policies on environmental investment by heavily polluting enterprises. The findings indicate that the policies significantly promote environmental investment by heavily polluting firms, and this conclusion remains robust after addressing endogeneity through methods Mechanism analysis reveals that the policies primarily operate by alleviating corporate financing constraints and enhancing green innovation capabilities. Heterogeneity analysis further shows that the policy effects are more pronounced among non-state-owned enterprises, firms with higher ownership concentration, those located in non-resource-based cities, and enterprises in eastern regions, thereby confirming the differential marginal effects of the policies. This study highlights the positive role of energy conservation and emission reduction fiscal policies in stimulating corporate green investment and fostering value creation, providing valuable empirical evidence to cultivate new green productive forces.