Are low carbon cities attractive to cleantech firms? Empirical evidence from a survey

• The paper studies the interests of cleantech firms to open branches in low carbon cities.
• The paper identifies key factors and policies to enhance attractiveness of low carbon cities.
• The study identifies the presence of the gap in firms’ perceptions of the features of low carbon cities and their interests in relocating to low carbon cities.
• The paper presents the effectiveness of policy initiatives to attract R&D activities to low carbon cities.

This paper explores the business attractiveness of low carbon cities using a survey on cleantech firms. The results show that cleantech firms indicate neutral interest in developing physical presence in low carbon cities, even though they perceive positive effects of low carbon urban features on resident productivity and health. Business conditions that affect operating costs tend to have greater influences than market access factors, which are associated with the supply and demand of factors of production, on firms’ decisions to relocate to low carbon cities. Conventional policies such as intellectual property rights protection and the development of intellectual clusters remain critical in incentivizing research and development in low carbon technology in low carbon cities. In summary, the low carbon features of a city do not appear to have major advantages in attracting cleantech companies. The diffusion of low carbon cities is likely to be driven by public environmental policies rather than corporate demand in the near future.