Can environmental regulation promote urban green innovation Efficiency? An empirical study based on Chinese cities

Considering the heterogeneity of environmental regulation, this study calculates the green innovation efficiency of 235 cities in Mainland China from 2004 to 2016. The study builds a spatial measurement model based on the geographic weight matrix to verify the mechanism through which environmental regulation affects regional green innovation efficiency. This study mainly finds that 1) green innovation efficiency has a large spatial imbalance in 235 Chinese cities. During the study period, green innovation efficiency rises in Eastern China, remains stable in Central China, and declines in Western China. Overall, China shows a trend of “rising in the East, stabilizing in Central China, declining in the West.”; 2) the spatial autocorrelation test shows a significant positive autocorrelation of urban green innovation efficiency and the spatial measurement test results show that it has a significant spatial spillover effect; and 3) according to the spatial error model, environmental regulation has a positive U-shaped relationship with urban green innovation efficiency that can be reinforced by increasing investment in educational resources, optimizing the industrial structure, and improving economic development, supporting the Porter hypothesis at the scale of Chinese cities.