Achieving carbon neutrality: the effect of China pilot Free Trade Zone policy on green technology innovation

Evaluating the effect of China pilot Free Trade Zone (FTZ) policy on green technology innovation is important for achieving China’s carbon neutrality targets. Based on the panel data of 30 provincial administrative regions in China from 2009 to 2019, this study investigates the effect of the pilot FTZ policy on green technology innovation by using the difference-in-differences method. The study’s findings indicate the following: (1) The pilot FTZ policy promotes the development of green technology innovation, and there is a policy lag in a few pilot regions. (2) The mediation effect analysis shows that the pilot FTZ policy promotes the development of green technology innovation by improving the marketization process and enhancing innovative talent gathering. (3) The heterogeneity analysis shows that the pilot FTZ policy is more effective in promoting green technology innovation when implemented in regions with developed economies or higher levels of human capital. Moreover, the pilot FTZ policy mainly has a significant promoting effect on green utility model patents. Based on these results, policy recommendations are proposed to promote the development of green technology innovation and the achievement of China’s carbon neutrality targets.