Abstract: Exploring whether “high-quality” substantive innovation and “large-scale” strategic innovation can drive the low-carbon transformation and development, as well as the conditions and mechanisms of their occurrence, is of vital importance for achieving the innovation-driven development strategy and “dual carbon” goals. Matching the China Industrial Enterprise database, the China Patent Database, and the China Enterprise Pollution Database, this paper empirically estimates the carbon emission efficiency of China’s micro-enterprises using Non-radial Directional Distance Function. Then, we employ the fixed effect model, dual machine learning model, and instrumental variable method to examine the overall influence, heterogeneous effects, and mechanisms through which substantive innovation and strategic innovation impact carbon emission efficiency. We find that substantive innovation and strategic innovation can effectively improve carbon emission efficiency at the overall level. However, the promotion effects have a heterogeneity among different regions, industries, and enterprises. Enterprises located in the central and western regions must primarily rely on the catch-up effect of strategic innovation to enhance carbon emission efficiency. Low-pollution industry and non-state-owned enterprises can only improve carbon emission efficiency through substantive innovation. Mechanism analysis shows that strengthening environmental compliance and promoting resource recycling and utilization serve as intermediary channels for both substantive innovation and strategic innovation to improve carbon emission efficiency; while optimizing energy structure is a mechanism only for substantive innovation to increase carbon emission efficiency. Our work not only enriches the cross-disciplinary research in the fields of innovation economy and energy and environmental management, but also provides theoretical support and decision-making basis for China’s practice of innovation-driven development.

Key words: Substantive innovation, Strategic innovation, Carbon emission efficiency, Low-carbon transition development, Industrial enterprises