Study on the impact of informal environmental regulation on substantive green innovation in China: evidence from PITI disclosure

Informal environmental regulation plays an important role in green innovation, which is of great significance to realize the win-win situation between environmental protection and economic development. However, few studies have focused on the incentive effect of informal environmental regulation on innovation motivation. Based on the panel data of 286 cities from 2003 to 2018, the DID (difference-in-differences) model is used to investigate the impact of pollution Information Transparency Index (PITI) published by ENGOs (Environmental Non-governmental Organizations) on substantive green innovation. The results show that PITI disclosure has a significant positive and robust effect on substantive green innovation in China. Additionally, heterogeneous analysis shows that key environmental protection and highly innovative cities benefit more from PITI disclosure. The effect in the second stage is stronger than in the first stage. Mechanism analysis shows that PITI disclosure enhances substantive green innovation through FDI (Foreign Direct Investment) and human capital channels. Based on the above conclusions, three policy implications are put forward in this paper.