Synergy or crowding-out? How the superposition of mitigation and adaptation policies shapes firm green innovation in China

Abstract

Climate governance increasingly requires the simultaneous pursuit of mitigation and adaptation. However, whether their policy superposition promotes or constrains firm green innovation remains unclear. Drawing on Policy Mix Theory, this study applies a Double Machine Learning framework to analyze 11,012 firm-year observations of Chinese A-share listed firms (2005–2023), exploiting the overlapping implementation of the Low-Carbon City Pilot and the Climate-Resilient City Pilot. We find that the superposition of the two pilots generates policy synergy and significantly enhances firm green innovation (β = 0.259, p < 0.01), with a stronger response for invention patents (β = 0.319, p < 0.01) than for utility models. Mechanism analysis reveals that this dual-pilot superposition heightens managerial climate-risk attention (β = 0.099, p < 0.01) and increases government environmental subsidies (β = 1.300, p < 0.05). The synergy effect is concentrated among state-owned enterprises and financially unconstrained firms, is stronger in non-super-large cities and eastern regions, and is activated primarily when mitigation pressure is high but adaptation pressure is low. These heterogeneous responses across ownership types and regional conditions further suggest that the realization of such cross-objective policy synergies depends on firms’ absorptive capacity and the local institutional environment, factors largely overlooked in current policy-mix designs.