The “service attribute” of public services determines that the value creation of public services depends on the continuous interaction between service providers and users, which is called “value co-creation”. The phenomenon of service failure in the process of public service delivery will affect this value co-creation process. Existing studies have paid insufficient attention to the practical impact of public service failure and lack a comprehensive understanding and analysis of its internal mechanisms.

To explore the impact of public service failure on the public's willingness to participate in the co-creation of public service value, this study takes real cases of government service failure as the entry point and empirically examines the differential impact of public service failure on the public's willingness to participate in value co-creation under the two types of service failure, namely “service design failure” and “technical failure”, through an investigation experiment. An in-depth analysis of the internal mechanism and path of this influence effect is conducted from the perspective of government trust, and the boundary conditions of the impact of public service failure under different past service performance levels are further compared.

The results show that, compared with technical failure, service design failure has a greater negative impact on government trust and the public's willingness to participate in value co-creation. Government trust plays a partial mediating role in the process in which the failure of public services affects the public's willingness to participate in value co-creation. When the service performance level was relatively high in the past, the negative impact of public service failure on the public's willingness to participate in value co-creation through government trust was weaker.

The main theoretical contributions of this study are as follows: Firstly, the study expands the micro-level research on the co-creation of public service value and incorporates the service defects that occur during the public service process into the research scope of the antecedents of public participation in value co-creation. Secondly, this study verified the influence mechanism of public service failure in the Chinese context. The research conclusion initially responded to classic research topics such as the causes of public service failure, public reactions to public service failure, and consequences of public service failure. Finally, the study explored the influence mechanism of public service failure on government trust from the perspective of historical performance feedback, and found that a higher level of past service performance helps public organizations resist the negative impact of public service failure.

The research conclusions and findings provide new theoretical knowledge for understanding the consequences of public service failure, and also offer inspirations and suggestions for governing service failure and enhancing public participation in public services.