The impact of environmental regulations and foreign direct investment on industrial structure upgrading

Yuanping Zhao, Chunfeng Shen and Cheng Han

Finance Research Letters, 2025, vol. 76, issue C

Abstract: This study investigates the influence of environmental regulations, foreign direct investment (FDI), and their interplay on the advancement of industrial structure, utilizing panel data from 284 prefectural-level cities spanning the years 2008 to 2021. The findings reveal that both environmental regulations and FDI exert individual effects on the industrial structure, while also jointly imposing a notable negative impact through their interaction. Furthermore, heterogeneity analysis demonstrates that these effects are more pronounced in the eastern region. Additionally, it is observed that environmental regulations significantly contribute to the upgrading of the industrial structure by fostering an increase in the number of green patents awarded.

Keywords: Environmental regulation; Foreign direct investment; Industrial structure (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:76:y:2025:i:c:s1544612325002685

DOI: 10.1016/j.frl.2025.107004

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