The ambient air quality standards, green innovation, and urban air quality: evidence from China

Abstract As China’s economy transitions, environmental issues have become a major concern. This study examines the impact of Ambient Air Quality Standards (AAQS) on urban air quality using panel data from 284 cities in China from 2006 to 2019. The study utilizes DID (Difference-in-Difference) models to analyze the regulatory effects of AAQS and its spatial spillover. Additionally, the serial multiple mediation models are constructed to investigate the role of green innovation. The findings reveal that the AAQS positively affects urban air quality, albeit with a notable “hysteresis effect.” Local implementation of AAQS worsens air quality in neighboring cities within a distance of 400 km, but beyond 400 km, the effect is reversed. Heterogeneity analysis shows that AAQS improves air quality in central cities, large-sized and medium-sized cities, cities with weak environmental governance, and resource-based cities. Mechanism tests suggest that AAQS may enhance urban air quality by promoting green innovation and optimizing industrial structure. Especially, either the energy-use effect or industrial-structure effect triggered by green innovation can contribute to the improvement of urban air quality.