Heterogeneous effects of environmental regulations on green technology innovation: measurement by using patents and evidence from China’s prefecture-level cities

Environmental regulations have great practical significance for promoting green technology innovation in cities, leading to green transformation and sustainable development. This study focuses on the effects of environmental regulations, including command-and-control (air quality standards) and market-incentive types (carbon emissions trading systems), on green technology innovation behaviours, with production-side and pollution-side types, respectively. To measure green technology innovation, the number of invention patents per capita in the subfields of energy conservation and alternative energy was selected as the measurement on the production side, and the number of invention patents per capita in the subfield of waste management was selected as the measurement on the pollution side. By examining panel data of 273 prefecture-level cities in China from 2007 to 2019 and taking China’s air quality standards and carbon emissions trading system as a quasi-natural experiment, we empirically tested the hypotheses using the difference-in-difference method and found the following important results. (1) Command-and-control and market-incentive environmental regulations have an important role in promoting green technology innovation overall. (2) Command-and-control environmental regulations have a stronger promoting effect on the pollution side of green technology innovation, whereas market-inventive environmental regulations have a stronger promoting effect on the production side. (3) Command-and-control environmental regulations have important short- and long-term roles, whereas market-incentive environmental regulations play a significant role only in the long term. This study verifies the heterogeneous effects of environmental regulations on green technology innovation behaviour and timeliness. Finally, the empirical results provide valuable recommendations for implementing suitable environmental policies that stimulate green technology innovation to protect the environment and reduce emissions.