The province-managing-county reform and green innovation of enterprises: evidence from the quasi-natural experiment

Based on the database of green patents of China's A-share listed enterprises from 2001 to 2018, this paper identifies the impact of the province-managing-county (PMC) fiscal reform on the green innovation performance of enterprises by using staggered DID method. The results show that the PMC fiscal reform significantly promotes enterprises' green innovation performance, and this impact is not only reflected in the quantity of green patents but also in the quality. The mechanism test finds that the policy effect of PMC fiscal reform comes from the attraction of environmental investment and optimization of human capital structure. The PMC fiscal reform expands the financial autonomy of county governments, facilitating the compensation and allocation mechanism. Moreover, the paper incorporates the county-power-expansion (CPE) reform into the robustness test to exclude the interference of other policies in the same period.