Abstract
Based on the provincial panel data of China during 2006–2017, this study uses the panel smooth transition (PSTR) model to study the dynamic transformation mechanism of pollution emission under environmental regulation. We focus on technological progress, economic growth, and foreign direct investment (FDI) as threshold variables, and analyses the non-linear effects of environmental regulation on pollution emissions under those threshold variables, attempting to explore the effectiveness of existing environmental regulations. The structure of biased technological progress is based on the slacks-based measure (SBM) and Global-Malmquist–Luenberger index, which is divided into pollution-biased technology progress and clean-biased technology progress. Finally, we use the panel vector auto regressive (PVAR) algorithm to further verify the relationship. The findings are as follows: (1) Environmental regulation has a significant nonlinear effect on pollution emissions, and technological progress is the optimal threshold variable of this study. (2) Under the influence of these three factors, environmental regulation has a substitution effect on pollution discharge, and a stronger substitution effect on emission reduction in areas with advanced technology and high FDI. It also has a lower emission reduction effect in the high-system areas of economic development than in the low-system areas. (3) The PVAR results show that the impact on environmental regulation of technological progress and FDI has gradually turned from positive to negative; the impact of economic growth on environmental regulation has always been positive but is gradually decreasing. This study points out the direction for governments and companies to implement effective environmental regulations.
Highlights
After nearly 40 years of rapid economic growth through reform and opening up, China has become the world’s second largest economy, and its economic achievements have attracted worldwide attention
When gdpit > 0.1931, the model is located in the high system, and the elasticity coefficient of environmental regulation to pollution emissions is 0.1454; that is, when the environmental regulation increases by 1 unit, pollution emissions reduce by 0.1454 units
FDIit < 0.0962, the model is located in the low system, and the elasticity coefficient of environmental regulation to pollution emissions is −0.0003; that is, when environmental regulation increases by 1 unit, pollution emissions reduce by 0.0003 units, but it is not significant
Summary
After nearly 40 years of rapid economic growth through reform and opening up, China has become the world’s second largest economy, and its economic achievements have attracted worldwide attention. Public Health 2021, 18, 4658 in exchange for economic growth [1] This kind of economic growth model has improved people’s quality of life, the ensuing environmental pollution problems it brings have led China to develop a large amount of environmental regulations in the process of building a resource-saving and environment-friendly society, and will help promote a win–win situation of economic growth and environmental protection) [2]. The second is the ‘pollution refuge hypothesis’, which posits that, in order to avoid restrictions or reduce compliance costs in an open economy, international differences in environmental standards or regulatory levels in terms of trade or investment lead to cross-border transfers of polluting industries [7,8] This results in adjustments to the national or regional industrial structure. The fourth part is the empirical analysis, and the fifth part is the conclusion, recommendation and discussion
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