Environmental Regulation and Economic Development: Evidence from the River Chief System in China

Liwen Liu and Caiquan Bai
Additional contact information
Liwen Liu: School of Economics, Anhui University, Hefei, Anhui 230601, P. R. China
Caiquan Bai: ��The Center for Economic Research, Shandong University, Ji’nan, Shandong 250100, P. R. China

Water Economics and Policy (WEP), 2022, vol. 08, issue 04, 1-32

Abstract: Existing studies have not reached a consensus on whether environmental regulations can drive economic development while strengthening pollution control. Based on the panel data of 226 cities in China from 2004 to 2016, this paper uses the difference-in-differences (DID) estimation to investigate the impact of the River Chief System (RCS) on regional economic development for the first time. The findings are as follows: (1) the RCS significantly increases the regional gross domestic product (GDP) and per capita GDP, and a series of robustness tests also prove this conclusion; (2) the heterogeneity tests indicate that the positive effect of RCS on economic development is more significant in cities with a lower administrative level, eastern cities, small cities and cities with lower water resource endowments; and (3) the mechanism tests show that the RCS promotes urban economic development mainly through the two channels of industrial structure upgrading and technological innovation. These findings are of practical significance for China and other countries to balance economic development and environmental protection when formulating and implementing environmental regulatory policies.

Keywords: Environmental regulation; economic development; difference-in-differences; River Chief System (search for similar items in EconPapers)
JEL-codes: O13 Q53 Q58 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S2382624X22400100
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:wepxxx:v:08:y:2022:i:04:n:s2382624x22400100

Ordering information: This journal article can be ordered from

DOI: 10.1142/S2382624X22400100

Access Statistics for this article

Water Economics and Policy (WEP) is currently edited by Ariel Dinar

More articles in Water Economics and Policy (WEP) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().