The influence of environmental regulation on industrial structure upgrading: Based on the strategic interaction behavior of environmental regulation among local governments

Promoting the industrial structure upgrading is the key path to guide the high-quality development of a country's economy. Based on the perspective of strategic interaction between local governments, using the panel data of 30 provinces in China from 2004 to 2017, this paper makes an empirical analysis on the impact of environmental regulation on the upgrading of industrial structure with the help of spatial panel Durbin model. The results show that: (1) There is a significant positive spatial correlation in the upgrading of industrial structure during the sample period. (2) There are regional differences in the impact of environmental regulation on the upgrading of industrial structure. Under the national sample and the eastern sample, there is a positive correlation between environmental regulation and the upgrading of industrial structure; under the sample of the central and western regions, there is a negative correlation between environmental regulation and the upgrading of industrial structure. (3) The strategic interaction of environmental regulation among local governments has a differential impact on the upgrading of industrial structure. Under the national sample, the imitation strategy is generally adopted, which is specifically manifested as Race to the Bottom.

Automated summary

This paper investigates the impact of environmental regulation on the upgrading of industrial structure, and finds spatial correlation, regional differences, and strategic interaction among local governments have differential effects on industrial structure upgrading. The study shows that different regions have varied responses to environmental regulation, which requires targeted consideration in policy-making.