Zero-waste city policy and the short-lived efficiency window in urban green innovation: evidence from China’s staggered pilot

Abstract A zero-waste policy may improve waste management without producing a lasting increase in urban green innovation efficiency. This study examines this issue using China’s Zero-waste City Pilot (ZWCP), which was introduced in different cities at different times. Using a balanced panel of 210 Chinese prefecture-level cities from 2012 to 2023, we measure green innovation efficiency (GIE) with a two-stage slacks-based DEA model and estimate the policy effect with the doubly robust difference-in-differences method developed by Callaway and Sant’Anna (2021). The DEA model divides GIE into knowledge production efficiency (E₁) and economic conversion efficiency (E₂). The results show that ZWCP improves GIE only in the policy launch year. In 2020, the calendar-time ATT is 0.0330 (p = 0.043), equal to an increase of about 3.35%. E₁ rises by 4.64% and E₂ by 2.26%. However, the effects after 2020 and the overall ATT are not statistically significant. In contrast, the industrial solid waste comprehensive utilization rate increases by 5.93 percentage points and continues to rise. ZWCP therefore produces lasting progress in waste utilization, but its effect on GIE is short-lived. Among the channels examined, only industrial restructuring receives statistical support. It lowers the ratio of tertiary to secondary industry output and explains about 17% of the effect on GIE. These findings show that direct waste management results and GIE can change differently over time. Policy evaluation should therefore consider both types of outcomes and continue beyond the launch stage. Sustained improvements in GIE may also depend on continued technology diffusion and market incentives.