Driving Green Innovation Toward Dual Carbon Targets: The Roles of Policy Synergy and Leading Enterprises

More than one type of policy is necessary to advance the sustainability transition and stimulate innovation. However, limited empirical evidence exists regarding the synergistic effects of environmental and innovation policies on corporate green innovation. Using data on Chinese listed companies in heavy-pollution industries from 2007 to 2022 as samples, this study employs a multi-phase difference-in-differences (DID) approach to examine the synergistic effect of China’s Innovative City Pilot Policy (ICPP) and Low-Carbon City Pilot Policy (LCPP) on corporate green innovation. The results show that the ICPP-LCPP synergy promotes green innovation among enterprises in heavily polluting industries. Further analyses reveal that this effect is concentrated among leading enterprises, with large state-owned leading enterprises (LSLEs) exhibiting a particularly pronounced response. Meanwhile, environmental, social, and governance (ESG) performance positively moderates the relationship between the ICPP–LCPP synergy and green innovation among leading enterprises. Green innovation by leading enterprises has a positive effect on follower enterprises’ green patent grants, particularly green invention patent grants. This study provides important insights into how policy synergy can foster corporate green innovation and facilitate a collaborative sustainability transition involving both leading and follower enterprises.