Deregulation and green innovation: Does cultural reform pilot project matter

Green innovation is an important driving force for sustainable development. However China often imposes a wide variety of government regulations on green innovation One important reason behind these government regulations is the confinement of the cultural market. However, does this confinement actually affect the green innovation in China? By employing a 278 Chinese cities’ dataset, we examine the effect of cultural reform pilot project on green innovation. Through the spatial difference-in-difference approach with the time trend, our results show that cultural reform pilot project (CRPP) is a significant determinist affecting the green innovation in China. Specifically, implementing CRPP promote green innovation in pilot cities which resulting from labour productivity exaltation, marketization rate increasing. The CRPP also have a spatial ripple effect which resulting from economic density promotion. Furthermore, the green innovation promotion is greater in cities which participating into World Technopolis Association, being included in the National Historical and Cultural Cities List and having high political hierarchy. Our conclusions still robustness after adopting a series of tests and alternative analyses. This paper not only provide evidence for the further implementation of cultural reform pilot project nationwide, but also provide policy implications on sustainable development in the post Covid-19 era.