Will Environmental Regulation Narrow the Gap in Regional Economic Growth?

Abstract

Empirical studies have shown that China's Air Pollution Prevention and Control Law (APPCL2000), as an environmental regulation, has significantly alleviated the air pollution problem and improved the TFP of air polluting enterprises. However, few scholars have studied the regional heterogeneity of this policy. To study this issue, this manuscript introduces the "Hu Line" from the perspective of regional resource endowment differences and divides China into a resource advantage area (A area) and a resource disadvantage area (B area). Subsequently, this manuscript uses the triple difference model and big data of Chinese industrial enterprises to verify. The results show that under environmental regulations, the TFP of air polluting enterprises in B area has increased more than in A area, and the rapid decline in the proportion of low-efficiency air polluting enterprises in B area is the main mechanism. It shows that environmental regulation is beneficial to narrow the gap of regional economic growth and realize economic catch-up in resource-disadvantaged areas.

Green Technology Transfer, Environmental Regulation, and Regional Green Development Chasm: Based on the Empirical Evidence from Yangtze River Delta

“…The academics have done a lot of research on the influencing factors of the green development chasm, and scholars generally believe that green development chasm arises as a result of a combination of factors including the level of green technology, knowledge linkages, socio-economic environment, knowledge absorptive capacity, and government environmental regulations, etc. [ 13 , 32 , 33 ].…”

“…Economically developed regions, in contrast, can be more likely to avoid the negative impact, and environmental regulation will even promote the agglomeration of innovation factors towards to developed regions [ 44 ], which in turn lead to a widening regional development chasm. Meanwhile, there is also a large number of scholars who believe that environmental regulation will not lead to a widening of the green development chasm [ 13 , 45 ]. On the one hand, environmental regulation will inhibit the entry or force the exit of inefficient enterprises and improve regional production efficiency, and then will also promote the transfer of production factors to high-productivity enterprises, optimizing the efficiency of resource allocation [ 45 ].…”

“…On the one hand, environmental regulation will inhibit the entry or force the exit of inefficient enterprises and improve regional production efficiency, and then will also promote the transfer of production factors to high-productivity enterprises, optimizing the efficiency of resource allocation [ 45 ]. On the other hand, national unified environmental regulation will increase the entry cost of polluting enterprises in less developed areas, and discourage their entry, thus improve the green total factor productivity (TFP), which will be conducive to narrowing the regional green development chasm on a long-term perspective [ 13 ]. In addition, the impact of environmental regulation on the green development chasm is also reflected in the environmental and social dimensions.…”

“…For this reason, the relationship between green technology transfer and the green development chasm calls for more detailed consideration. In order to compensate for market failure, academics have addressed that the positive role of environmental regulation in stimulating green technology innovation, increasing the flow of green technology across regions, and bridging the green development chasm [ 13 , 14 ]. Realistically, however, the role of environmental regulation on the green development chasm is complex [ 13 ].…”

“…In order to compensate for market failure, academics have addressed that the positive role of environmental regulation in stimulating green technology innovation, increasing the flow of green technology across regions, and bridging the green development chasm [ 13 , 14 ]. Realistically, however, the role of environmental regulation on the green development chasm is complex [ 13 ]. On one hand, some regions have chosen to weaken environmental regulations in pursuit of short-term economic growth, leading to the entry of highly pollution and carbon-emissions industries, and being locked into a destructive development path [ 15 ].…”