Effects of official and unofficial environmental regulations on environmental quality: Evidence from the Yangtze River Economic Belt, China

Abstract

Due to the increasing impact of climate change, there is a need to examine the effect of environmental regulation on environmental quality. Consequently, we examine the nonlinear and mediation effects of environmental regulation on environmental quality using panel data of 45 major cities in the Yangtze River Economic Belt, China, from 2013 to 2020. Environmental regulation is divided into official and unofficial environmental regulations according to its formality. The results indicate that an increase of official and unofficial environmental regulations can promote the improvement of environmental quality. In fact, the positive effect of environmental regulation on cities with better environmental quality is greater than that of cities with poorer environmental quality. The implementation of both official and unofficial environmental regulations can improve environmental quality better than the single implementation of either official environmental regulation or unofficial environmental regulation. There are full mediation effects of Gross Domestic Product per capita and technological progress in the positive effects of official environmental regulation on environmental quality. There are also partial mediation effects of technological progress and industrial structure in the positive effects of unofficial environmental regulation on environmental quality. This study assesses the policy effectiveness of environmental regulation and determines the underlying mechanism between environmental regulation and environmental quality to provide a reference for other countries regarding environmental improvement.