Research on the promotion of urban green economic efficiency by green fiscal incentive policies: a quasi-natural experiment based on comprehensive demonstration cities for energy-saving and emission-reduction fiscal policies

Fiscal policies for energy conservation and emission reduction serve as vital environmental regulatory tools for promoting low-carbon economic transformation and ecological civilization. This study evaluates the impact of the “Comprehensive Demonstration Cities of Fiscal Policies for Energy Conservation and Emission Reduction” policy on urban green development to understand its effectiveness and underlying mechanisms. Treating the establishment of demonstration cities as a quasi-natural experiment, this paper measures urban green economic efficiency using the Malmquist index and an undesirable-output Slack-Based Measure (SBM) model. Based on panel data from 277 Chinese cities spanning 2006 to 2021, the policy impact is empirically examined through a multi-period difference-in-differences (DID) model. The reliability of the findings is verified via parallel trend tests, placebo tests, PSM-DID, and endogeneity tests. The results indicate that the demonstration city policy significantly improves urban green economic efficiency, a conclusion that remains robust across various tests. Mechanism analysis reveals that the policy operates through three primary channels: enhancing government environmental attention, driving industrial structure upgrading, and strengthening green innovation capacity. Furthermore, the policy exhibits significant spatial spillover effects, positively influencing the green development of surrounding cities. These findings highlight the effectiveness of green fiscal policies in incentivizing sustainable urban development. The study provides important policy implications for optimizing environmental fiscal mechanisms and suggests that leveraging these incentive effects is crucial for guiding regional green transitions and achieving long-term ecological goals.