1. Introduction

The deterioration of global air quality and the increasing constraints on resources pose severe threats to human habitat. Countries worldwide are actively implementing measures to address these challenges and strive to achieve sustainable development. Sustainable development entails the harmonious and long-term advancement of society, the economy, the population, resources, and the environment. Environmental performance, a key indicator for assessing the coordinated development of the economy and the environment, aims to achieve high-quality economic growth at a minimal environmental cost and forms a critical component of sustainable development. Historically, China’s extensive economic development model, while fostering rapid economic growth, has also led to a range of environmental issues. According to the 2022 Environmental Performance Index (EPI) report, China scored 28.40, ranking 160th out of 180 evaluated countries [1]. This indicates significant room for improvement in China’s environmental performance, especially considering its status as the world’s second-largest economy. Enhancing China’s environmental performance is crucial for achieving global sustainable development. It is worth noting that in the past decade, China has exerted tremendous efforts to enhance environmental performance and realize sustainable development. The 5th plenary session of the 19th Central Committee of the Communist Party of China explicitly emphasized the need to expedite green transformation and development, with the primary objective of promoting sustained and robust economic growth.

Cities serve as major sources of energy consumption and pollution emissions [2], but they also serve as key drivers of innovation activities. Promoting urban innovation to drive economic growth and achieve coordinated development between economic growth and environmental quality is a fundamental approach to enhancing environmental performance [3,4]. However, innovation is characterized by significant investments, long cycles, and high risks [5], particularly in the field of technological innovation. Therefore, it is necessary to formulate relevant innovation support policies [6]. For instance, the United States and Germany have respectively published three editions of the “U.S. Innovation Strategy” and four editions of the “German High-Tech Strategy” [7,8]. These initiatives aim to foster the development of national innovation-driven cities [4]. The United Kingdom has launched the “Tech City” initiative to support the “Innovation City” strategy [9,10]. In 2008, China introduced the national strategy of innovation-driven development and proposed the establishment of national innovation-driven cities, with Shenzhen being selected as the first pilot city for this initiative. As of the end of 2018, China had established 78 pilot cities for innovation, including 76 cities at the prefecture level or above, and 2 county-level cities. Among them, from 2009 to 2013, a total of 60 cities were approved as pilot cities for innovation. In 2018, an additional 17 pilot cities were added, including Jilin City and Xuzhou City. In addition, in April 2010, the Ministry of Science and Technology issued the “Guiding Opinions on Further Promoting Pilot Work for Innovation-Driven Cities”. This document provided an evaluation indicator system for innovation-driven cities from six aspects: innovation investment, corporate innovation, technology commercialization, high-tech industries, technology benefiting the public, and innovation environment. In December 2016, the National Development and Reform Commission and the Ministry of Science and Technology jointly issued the “Guidelines for Building Innovation-Driven Cities”, further revising the indicator system. The assessment indicators, key tasks, policy support, and environmental performance of innovation pilot cities are deeply interconnected. So, do the policies supporting innovation-driven development, such as the innovative city pilot (ICP) policies, truly promote the improvement of urban environmental performance (UEP) in China? If so, what are the specific mechanisms, and do heterogeneity and policy spillovers exist? How can we maximize the promotion mechanisms of ICP policies? Exploring these questions is of great theoretical and practical significance for improving China’s modern innovation system and better utilizing innovation policies for sustainable economic and social development.

Currently, research on environmental performance primarily focuses on two aspects: measurement methods and influencing factors. In terms of measurement methods, the preferred approach is the use of composite indicator systems to measure environmental performance [11,12,13], such as the Environmental Performance Index (EPI) released by Yale University in 2022. However, the indicator selection in this method is somewhat subjective. Alternatively, some scholars measure environmental performance by the ratio of pollution emissions to GDP output [14]. However, this method does not consider the comprehensive impact of other production factors on environmental performance. Additionally, a portion of the research adopts Data Envelopment Analysis (DEA) to measure environmental performance [15,16,17,18]. This method takes into account inputs, ideal outputs, and undesirable outputs (pollutants), which can avoid the subjectivity of indicator selection and comprehensively consider other production factors [19]. Regarding influencing factors, according to the Environmental Kuznets Curve (EKC) hypothesis [20], economic growth, population size, and production technology are direct driving factors. Additionally, various urban infrastructure [21], energy efficiency [22], industrial agglomeration [23], and a range of environmental regulation measures [24,25] are crucial influencing factors. Furthermore, some studies have highlighted the role of innovation, particularly the impact of green technological innovation on environmental performance [26,27]. However, the role of innovation policies in influencing environmental performance, particularly ICP policies, has been largely overlooked.

Schumpeter [28] first proposed “innovation theory”, which views innovation as a “creative destruction” that disrupts the existing economic and market structures through the introduction of new products, technologies, and market openings to achieve dynamic high-quality growth. Since Schumpeter’s concept of innovation, the understanding, classification, and measurement of innovation have been continuously improved [29]. Chesbrough [30] introduced the concept of open innovation, and Hobcraft [31] utilized the Three Horizons Framework to articulate innovation. Developed countries, represented by the OECD, have released the Oslo Manual and the Frascati Manual, which define and classify innovation activities, standardizing the statistics of innovation activities [29]. Research on the relationship between innovation and environmental performance has primarily been conducted from the perspective of technological innovation. The uncertainty of innovation activities means that innovation does not inherently possess “green” attributes [32]. The research on the relationship between the two has formed three viewpoints: promotion theory [33], inhibition theory [34], and non-linear theory [35]. Innovation not only includes the five aspects proposed by Schumpeter but also encompasses institutional innovation and other innovative environments [29]. Innovative cities aim to eliminate the negative externalities of innovation activities by creating a favorable innovative environment. Therefore, some studies have explored the characteristics and evaluation indicators of innovative cities [36,37], the connotation of innovative cities [38], implementation paths [38], and development models [39]. Furthermore, many studies have assessed the economic and environmental impacts of ICP policies, including their effects on energy efficiency [5], urban innovation capabilities [40], ecological efficiency [4], and industrial structure [41]. However, further research is needed to determine whether innovative cities possess “green” attributes.

Based on this, the study first uses the EBM-DEA model to measure UEP, effectively avoiding the problem of underestimating efficiency values in traditional DEA. Secondly, the national innovative city pilot (ICP) policy is treated as a quasi-natural experiment, and the Difference-in-Differences (DID) model with two-way fixed effects is employed to accurately identify the impact of the ICP policy on UEP, effectively addressing endogeneity issues that existed in previous models. Additionally, this study conducts robustness analysis using the PSM-DID model to mitigate sample self-selection bias. Finally, this study not only reveals the transmission mechanisms of the ICP policy’s impact on UEP from the aspects of technological innovation, industrial structure, and resource location, but also elucidates the heterogeneity of the ICP policy’s influence on UEP from the perspectives of geographic location, resource endowment, and urban administrative level. Furthermore, this study explores the spatial spillover effects of the ICP policy on UEP. By enriching the research on the relationship between innovation and environmental performance through the analysis of innovation pilot policies, this study provides Chinese experiences and evidence for implementing a global innovation-driven development strategy and driving sustainable economic and environmental development in cities.

2. Materials and Methods

2.1. The Pilot Cities

Considering the research period and sample, this study ultimately obtained 63 innovative pilot cities, while the remaining 220 cities were non-pilot cities. The spatial distribution of innovative pilot cities is shown in Figure 1. It can be observed that there are 38 cities in the eastern region, 14 cities in the central region, and 11 cities in the western region, accounting for 60.32%, 22.22%, and 17.46% of the total number of innovative pilot cities, respectively. The eastern region serves as the focus and core area for the innovative pilot city policies, and the spatial pattern of pilot cities aligns with the overall deployment of the innovation-driven development strategy, which aims to coordinate the layout of the eastern, central, and western regions.

2.2. Direct Drive Mechanism

The ICP policy mainly drives UEP through three action mechanisms: technological innovation, industrial structure upgrading, and resource allocation [4,40,42].

One important purpose for implementing an ICP policy is to increase the support of city innovation and promote the innovation elements agglomeration, which can accelerate the transformation of urban production mode from traditional extensive mode to green intensive mode, thus improving the UEP [43]. The ICP policy can promote the technological innovation of cities via three aspects, namely the strategic guidance effect, talent agglomeration effect, and economic agglomeration effect. First, an ICP policy can effectively promote city technological innovation through the strategic leading effect of the government [4]. Concerning “double externalities” in technological innovation, enterprises lack incentives to make technological innovation decisions [44]. Thus, innovation-oriented city pilot policies can enable the government to compensate for the risks of enterprises’ technological innovation through research and development subsidies [45]. Furthermore, it gives full play to the leading role of the government in the enterprises’ technological innovation and improve its level [46,47]. Second, the ICP policy is beneficial to technological innovation through the agglomeration effect of innovative talents [4]. Innovative talents primarily refer to individuals engaged in research and experimental development (R&D) activities. The agglomeration of innovative talents is one of the most critical elements of city innovation and an important carrier of city technological innovation. Innovative city pilot policy introduces domestic and foreign high-end talent and cultivates innovative talent. Furthermore, talent agglomeration can provide sufficient intellectual support for technological innovation [40]. Third, the ICP policy can promote the technological innovation development of cities through the agglomeration effect of an innovative economy. Innovation elements agglomeration brought about by implementing the ICP policy will accelerate the transformation of innovation achievements and form new economic growth poles. Apparently, the implementation of the ICP policy is conducive to technological innovation. In terms of the impact of technology innovation on UEP, early studies have revealed that technology innovation can exert a positive impact on UEP. The more advanced the technology, the “greener” the economic development [48]. For one thing, technological innovation at the production end helps to improve the efficiency of energy use [49], and reduce the emissions of pollutants in the production process, thus forming a pollutant prevention system and improving the urban environmental quality. Moreover, the innovation of environmental governance technology can improve the treatment efficiency of pollutants, promote the recycling of waste, and thus reduce the final discharge of pollutants [50]. In addition, technological innovation is also conducive to the use of clean energy, cleaner production [51], and the R & D and promotion of the pollution treatment equipment, thus improving the UEP. In sum, the ICP policy can help improve the UEP by promoting technology innovation.

In addition to technology innovation, industrial structure upgrading is another conduction mechanism in the causal connections between the ICP policy and UEP. The ICP policy is conducive to promoting industrial structure upgrading through the human capital effect and industrial cluster effect, thus promoting UEP. First, the ICP policy can promote the optimization of urban industrial structures through the human capital effect [52]. An innovative pilot city policy provides knowledge and technical personnel with high-quality jobs [53]. They create socioeconomic value to promote the land and other production factors flowing between regions and industries, and promote the industrial structure change speed, thus realizing industrial transformation and upgrade [41]. Second, the ICP policy can promote the optimization of urban industrial structures through the industrial cluster effect [54]. In the construction of innovative cities, key resources such as capital, workforce, technology, and equipment from the government are conducive to building new technology industries, forming new industrial clusters, promoting the rational urban industrial structure, and continuous transformation and upgrading [55]. As for the influence of industrial structure on UEP, a vast literature clarifies that the upgrading of industrial structure is an important driving factor for the improvement of urban environment [56,57]. The adjustment of industrial structure can bring about a reasonable distribution of resources among industries, and make full use of resources and reduce environmental pollution [58]. In addition, as the traditional industrial industry is gradually replaced by the technology- and knowledge-intensive industries, the pollution emissions of traditional industry will also be reduced, which will help improve urban environmental performance. Therefore, it is reasonable to believe that the ICP policy can help improve the UEP by promoting industrial structure upgrading.

The possible third conduction mechanism of the ICP policy affecting UEP is promoting resource allocation. First, the implementation of the ICP policy relies on the interconnection of super-complex innovation chains formed by several innovation factors. It realizes the optimal allocation of production factors among different regions, industries, and enterprises, therefore promoting synergy among production factors [59]. Second, the ICP policy is conducive to the inflow of innovative capital and innovative talents, thus helping reduce the misallocation of resources through the siphoning effect of investment and the aggregation effect of talents. Previous studies have proved that a mismatch of resources and distortion of the factor market inhibits the improvement of energy utilization efficiency [60], hinders the optimization of industrial structure, and aggravates environmental pollution [61]. Therefore, the implementation of ICP policies can improve urban environmental performance by mitigating element mismatch and improving resource allocation efficiency.

2.3. Spatial Spillover Mechanism

The ICP policy stresses the need to strengthen the open and sharing of all kinds of innovation resources within and between cities and speed up the spillover of innovation results [62]. This indicates that the ICP policy can form super-complex innovation chains to connect through characteristics of super networks. This will generate spatial connections through the flow of material resources and production factors, thus forming strong spatial correlation effects, which will also affect the UEP of surrounding cities [63,64].

From the perspective of the coordinated development of the regional ecological environment, the ICP policy not only plays the role of innovation radiation leading but also takes into account the role of pollution prevention and control “demonstration area”. This is a regional model to achieve the goal of a “win-win” economy and environment [65]. Scientific and technological innovation is the technological path to promote resource saving and control pollution emissions [45]. On the spatial scale, the ICP policy is conducive to regional financial accumulation and the talent inflow. This can promote innovation investment and scientific and technological activities, producing spatial spillover effects on the coupled development of an economy–environment system in adjacent regions [66], which is conducive to building a good ecological environment and market environment in neighboring units, effectively reducing the resource utilization of enterprises with high-pollution emissions and low-production efficiency, and promoting more high-quality resources to match clean enterprises with high-production efficiency, thus improving the UEP.

The above theoretical analysis is synthesized in Figure 2. According to the theoretical analysis, the following research hypotheses are constructed:

Hypothesis 1.

The implementation of ICP policies is conducive to the improvement of urban environmental performance.

Hypothesis 2.

Technology innovation, industrial structure upgrading, and resource allocation are three action mechanisms that the ICP policy affects UEP in China.

Hypothesis 3.

There is a spatial spillover characteristic in the improvement effect of the ICP policy on UEP.

3. Methods and Data

3.1. Methods

3.1.1. DID Model

As a government innovation policy implemented in batches, the ICP policy is regarded as a quasi-natural experiment in this study. Combined with the above theoretical analysis, this study constructs a progressive DID model to accurately identify the impact of ICP policies on UEP, as shown in Model

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Jun Gao