Smart city is a recent concept that has progressed considerably. However, studies on changes induced by smart city development have been lacking. To date, the association of environmental pollution with smart city construction is purely hypothetical without any direct evidence. Effect of smart city construction on environmental pollution is innovatively examined in this study by exploiting the smart city project in China as an exogenous change in the development of smart cities and using a difference-in-differences framework. Results showed that the construction of smart cities significantly reduces environmental pollution. The main analysis is robust to a variety of model specifications. Mechanisms through which the smart city project affects the upgrading of industrial structure, technological progress in pollution reduction, and increase in greening are provided and empirically identified.
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