Blue sky through intellectual property protection: quasi-experimental evidence from China's Intellectual Property City Program

A well-developed intellectual property system is an important backbone for green innovation and technology, which are widely regarded as crucial tools to combat haze pollution and achieve blue sky. Despite China's aggressive launch of the Intellectual Property City Program (IPCP) since 2012 to improve its intellectual property system, there is little evidence on whether and how IPCP affects haze pollution. Compiling a panel dataset of Chinese cities, we employ a difference-in-differences estimator to identify the causal impact of IPCP on haze pollution. We find that IPCP can effectively reduce haze pollution in IPCP cities compared to non-IPCP cities after the IPCP launch. Our instrumented results using ancient academies further support the haze-abatement effect of IPCP. Mechanism tests reveal that this reduction is driven by green innovation effect and resource allocation effect. The effect is pronounced in eastern cities and cities with high degrees of green innovation, marketization and environmental regulation intensity. Our findings provide support for the critical role of powerful IP protection in haze pollution control.