Environmental Benefits of the Central China Rise Strategy; Empirical Analysis Based on the PSM-DID Model

Abstract

Background: The Central China Rise Strategy is one of China’s important regional development strategies, and it has been officially implemented since 2006. Despite the obvious economic development resulting from the strategy, its impact on the environment remains unclear. Objective: Previous studies have focused more on the economic benefits of the Central China Rise Strategy while ignoring its environmental impact. This paper focuses on the environmental benefits and aims to promote the coordinated development between the economy and the environment. Methods: Panel data of 30 Chinese provinces from 2000 to 2017 were selected to construct a propensity score matching-difference-in-difference (PSM-DID) framework for systematic research that includes benchmark modeling, as well as dynamic effect and mechanism analyses. Results: ①The benchmark model and placebo test proved that the Central China Rise Strategy had increased environmental pollution.② Dynamic effect analysis revealed that the impact of the Central China Rise Strategy on environmental pollution has gradually increased in the short- and medium- term, with 2012 exhibiting the greatest augmentation, significantly reducing from 2016 onwards. ③The mechanism of action considers three mechanisms. The level of economic development is a path through which the Central China Rise Strategy leads to the aggravation of environmental pollution while the city size is not. Foreign direct investment has improved environmental pollution. Conclusions: The Central China Rise Strategy has aggravated environmental pollution, especially in the short and medium-term. In view of the mechanism path, we put forward three targeted suggestions. In the future, we will study some of the limitations of this paper: more mechanisms of action will be considered, and the use of new technologies, such as neural networks, will be compared with our results.