How does environmental regulation affect industrial green productivity of China's cities

Zhen Chen () and Ce Jia ()
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Zhen Chen: Chinese Academy of Sciences
Ce Jia: Renmin University of China

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2023, vol. 25, issue 9, No 48, 10143-10169

Abstract: Abstract The efficient implementation of environmental regulation and efforts to increase industrial green productivity (IGTFP) are essential to China’s green growth. Based on the panel data of 273 municipalities during 2007–2016, this paper employs Epsilon-based Malmquist index to measure IGTFP, which simultaneously incorporates industrial electricity consumption and pollutant emissions into the traditional productivity framework to measure industrial green growth among cities. Then this study employs spatial Durbin models to identify implementation patterns of strategic interplay of environmental regulation (SIOER) and its comprehensive impact on IGTFP. Three insights are provided at the national level. (1) The pattern of intercity SIOER is imitative. This is the main reason for more stringent environmental regulation in recent years. (2) SIOER can not only directly promote IGTFP growth in one city, but also nearby municipalities within 200 km of that city through spatial spillover effects. (3) SIOER promotes IGTFP growth mainly through its positive effects on technological progress. From the regional perspectives, SIOER's spatial spillover effects are consistent with the nationwide results, while SIOER's direct effects differ in the northeast, east, central, and west China. The reason for this is that SIOER's direct effects on influencing mechanisms differ in the four regions: In the east, SIOER's negative effects on technological progress completely neutralize its positive effects on pure technological efficiency. In the west, SIOER's negative effects on scale efficiency mostly offset its positive effects on technological progress. Therefore, to boost IGTFP growth, cities should interact concerning the implementation of environmental regulation within an appropriate geographical distance and local authorities should focus more on enhancing green technological progress.

Keywords: Industrial green productivity; Environmental regulation implementation interplay; Spatial Durbin model; Epsilon-based Malmquist index (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s10668-022-02480-7

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