How does China’s low-carbon city pilot program promote green investment: a spatial–temporal analysis at the city and firm levels

The study examines how China Low-Carbon City Pilot (LCCP) program, as a comprehensive environmental regulation, promotes green investment using a dual-level framework that links firm-level behavioral response with city-level spatial dynamics. Using panel data for 276 cities and 28,907 listed firms from 2008 to 2021, we employ multi-period difference-in-differences and a spatial DiD approach. The findings corroborate that the LCCP significantly increases green investment—by 8.1–15.7% at the firm level and 36–56% at the city level—providing clear evidence in support of the Porter Hypothesis under China’s hybrid regulatory framework. Public environmental engagement serves as an important, albeit nonlinear, transmission mechanism: greater public attention encourages investment, but its interaction with the policy generates short-term uncertainty that can weaken firms’ responses. The program also produces clear positive spatial spillovers, showing that pilot cities transmit green investment to surrounding areas and are entering the interaction stage of the green investment pole cycle. Considerable regional heterogeneity is observed, with eastern regions displaying radiation or interaction-stage patterns, while central and western regions remain in early polarization stages. These results underscore the need for strengthened regional coordination and more institutionalized public participation in advancing low-carbon development.