How Does the Low-Carbon City Pilot Policy Affect Firms’ Green Innovation? A Spatial DID Analysis Based on Multi-Dimensional Evidence

Corporate green technological innovation serves as an effective pathway to promote the green transformation of economic development. This paper utilizes panel data of A-share listed companies from 2007 to 2024 as the empirical sample, taking China’s “Low-Carbon City Pilot” policy as the quasi-natural experiment. Employing a multi-period difference-in-differences (DID) approach, the study empirically examines the supportive impact of this environmental protection policy on the green technological development of listed companies and explores the underlying mechanisms. The empirical results indicate that the low-carbon city pilot policy significantly enhances firms’ green innovation behavior. Further mechanism analysis reveals that alleviating financing constraints and strengthening environmental governance constitute key channels through which the policy exerts its effects. On one hand, this study confirms the actual innovation-promoting effects of the low-carbon city pilot policy at the micro level; on the other hand, it elucidates the transmission pathways—optimization of the financing environment and intensification of environmental enforcement—through which the policy translates into corporate actions. These findings provide important theoretical support and practical implications for governments to refine environmental policy frameworks and enhance the endogenous incentives for firms’ green development.