Public Participation-Based Environmental Regulation and Urban Green Innovation: Evidence from Chinese City-Level Panel Data

Abstract

This study examines whether public participation-based environmental regulation promotes urban green innovation in China. Using a city-level panel of 2,488 observations for 2013–2021, the paper estimates two-way fixed-effects and dynamic specifications in which green innovation is measured by ln (green patent grants + 1) and the core explanatory variable is the one- to three-year lagged average of the logged public-participation indicator. The preferred dynamic model yields a positive and statistically significant coefficient of 0.1083, suggesting that stronger public participation is associated with higher green patent output after controlling for city effects, year effects, and innovation persistence. Mechanism tests indicate that the environmental-governance channel is better supported than the government-response channel. The positive association is also stronger in cities with higher openness and larger environmental expenditure shares. Overall, the evidence suggests that public participation can complement formal environmental governance by strengthening monitoring and improving the credibility of green upgrading, although the identification remains observational rather than quasi-experimental.