The impact of China’s institutional opening-up policy on green innovation systems

Shifting the drivers of green innovation from a factor-driven model to system-coordinated mechanisms constitutes the core pathway to addressing the current imbalance between the quantity and quality of green technological innovation in China. Against this backdrop, we aim to explore the potential role of China’s institutional opening-up policy (CIOP)—centered on institutional transformation—in facilitating this shift in green innovation momentum. Drawing on new institutional economics, evolutionary economics, and systems evolution theory, we deconstruct the green innovation systems (GIS) into three dimensions—growth, sustainability, and accumulation—representing scale expansion, stable investment, and knowledge accumulation, respectively, to reveal its internal synergistic structure. Building upon this foundation, we treat China’s pilot free trade zones as quasi-natural experiments for CIOP. Utilizing panel data from 286 cities spanning 2008–2023, we develop a multi-period difference-in-differences model (DID) to identify the causal effect. Our conclusions are as follows: First, CIOP exerts a significantly positive impact on GIS, a finding that remains robust after a series of robustness tests. Second, CIOP indirectly influences GIS through two pathways: by strengthening local government investment in green innovation and by promoting cross-domain spillover of green knowledge, with the latter contributing more than the former. Third, regarding structural effects, CIOP exerts positive impacts across all three dimensions—growth, sustainability, and accumulation—while exerting stronger incentive effects on invention patents than utility model patents, indicating its efficacy in optimizing innovation quality. Finally, in terms of urban heterogeneity, the promotional effect of CIOP is more pronounced in ordinary prefecture-level cities and eastern cities. Economic foundations positively moderate this effect, while city size only amplifies it in eastern cities. Environmental regulations show no statistically significant impact, highlighting the complexity of the underlying mechanisms. We examine the impact of CIOP on green innovation from the perspective of systemic coordination, revealing its underlying mechanisms for optimizing green innovation structures and promoting regional equity. This provides crucial theoretical foundations and empirical support for activating endogenous green innovation through high-level openness and formulating differentiated policies.