The Establishment of an Administrative Approval Center and Urban Green Innovation: Evidence from China

Economic goals and non-economic goals often conflict in practice. Taking China as an example, this paper examines the impact of Administrative Approval Center (AAC) establishment on urban green innovation. A multi-period difference-in-difference (DID) method is applied to city-level panel data (2000–2022) in China to estimate the effect of AAC establishment on urban green innovation. The research results indicate that the establishment of AAC reduces urban green innovation due to the increased fiscal burden on local governments. This negative impact is particularly evident in the eastern and central regions, cities with stronger environmental regulations, or low-administrative-level cities. The conclusions of this paper have reference significance for other developing countries. To achieve sustainable development, central governments should enhance fiscal support and safeguards, local governments should implement differentiated environmental regulations, and digital technologies should be leveraged to reduce physical infrastructure costs and alleviate fiscal pressures.