*4.1. The Impact of TCZ Policy on the Green Innovation Performance*

Table 2 shows the DID results on the green innovation performance for TCZ policy corresponding to Equation (1). In column (1), we include no additional control variables, city–fixed effects, or year–fixed effects. The coefficient of the interaction term (Tcz × Post) in column (1) is significantly positive. In column (2) we include control variables, suggesting that TCZ policy increases the number of green patent applications by 71.8% on average and the p–value is less than 0.01. In column (3) we include control variables and control for city–fixed effects, while in column (4) we control for city–fixed effects, and year–fixed effects. Both of the results of column (3) and (4) remain highly significant (at the 1 percent level), and column (4) indicates there is a 53.4% increase in green patent applications of the cities in two control zones compared to the other cities. The finding is consistent with the hypothesis that more green patents were applied by target cities after the TCZ policy was enacted.


**Table 2.** Baseline Estimate.


**Table 2.** *Cont.*

Note: For each regression, the log volume of green patent applications is used as an outcome variable. Controls include total population at the end of the year (Pop), annual gross regional product (GDP), investment in fixed assets (Fixedinvest), foreign investment utilized (FDI), the logarithm of number of students in higher education institutions (Students), the logarithm of number of teachers in higher education institutions (Teachers), the logarithm of proportion of employment in the secondary industry (Second), the logarithm of employment at the end of the year (Employment), and the logarithm of number of new contracts signed in the current year (Contracts). Standard errors in parentheses are clustered at the city–year level. \* *p* < 0.10, \*\* *p* < 0.05, \*\*\* *p* < 0.01.
