Assessing the impact of environmental regulation and environmental co-governance on pollution transfer: Micro-evidence from China

Abstract

Pollution transfer is widespread in various countries. If differences in environmental regulation intensity exist across different regions in a country, pollution transfer may occur. Based on data from Chinese enterprises, this study constructs a comprehensive index of environmental regulation and the degree of environmental co-governance at the enterprise level and uses a panel probit model, the two-stage least squares method, and an interaction regression model to assess the effect of environmental regulation and environmental co-governance on pollution transfer. The probability of enterprise migration increases as environmental regulation intensity increases, confirming the pollution transfer effect of environmental regulation. The analysis of the influencing mechanism shows that environmental regulation can reduce the probability of pollution transfer through the “innovation compensation effect” and improve the probability of enterprise migration through the “compliance cost effect”. In addition, under the condition of established environmental regulation, environmental co-governance can reduce the probability of enterprise migration, inhibit the transfer of pollution to nearby areas, and improve the efficiency of environmental governance. This study is conducive to assessing the policy effectiveness of environmental regulation and provides a reference for other countries regarding pollution transfer.