Are smart cities green? The role of environmental and digital policies for Eco-innovation in China. (May 2023)

• Record Type: Journal Article
• Authors: Filiou, Despoina; Kesidou, Effie; Wu, Lichao
• Is Part Of: World development. Volume 165(2023)
• Publication Date: 2023-05
• Subjects: O38 -- R11 -- L5; Digital policy -- Environmental policy -- Eco-innovation -- Smart city -- China -- Difference-in-differences; Economic history -- 1990- -- Periodicals; Economic assistance -- Developing countries -- Periodicals; 330.9
• DOI: 10.1016/j.worlddev.2023.106212
• Languages: English
• ISSNs: 0305-750X

Abstract

Highlights: Estimate the joint impact of environmental and digital policies (for designing smart cities) upon the generation of eco-innovations. Apply negative binomial and quasi-natural experimental methods (i.e., Difference-in-Differences and Propensity Score Matching). When digital policies (Artificial Intelligence and Internet of Things) are implemented in cities that have adopted strict environmental policies, the production of green patents increases. Abstract: In this paper, we employ negative binomial and quasi-natural experimental methods (i.e., Difference-in-Differences and Propensity Score Matching), whereby we examine the joint impact of environmental and digital policies (for designing smart cities) upon the generation of eco-innovations in China. Using longitudinal data for the period 2006–2018, we examine the changes in green patents granted: (i) due to the implementation of various levels of stringency of environmental policies across all cities; and (ii) after the introduction of smart city policies in 2012 in China. The prior literature stresses the importance of environmental policies, yet less attention has been paid to digital policies required to drive eco-innovation and their spatial dimension in the context of a developing economy. Our results show that, when digital policies (artificial intelligence and internet of things) are implemented in cities that have adopted strict environmental policies, the production of green patents increases. We contribute to debates in the literature of policy mix for sustainability transitions in the context of a developing economy by illustrating the importance of both types of policy for eco-innovation, as they correct two market failures and, more importantly, address the systemic coordination problems that occur during the production of green patents.