Environmental regulation and haze pollution: Neighbor-companion or neighbor-beggar?

Abstract

The paper employs the spatial econometric method and in the Yangtze River Delta, constructs unique spatial matrices to analyze the effect of environmental regulation on haze pollution. The effect of formal and informal environmental regulation is also differentiated. The contributions of this paper are: (1) Research perspective: it compares the effects of informal and formal environmental regulations, stresses the effect of environmental regulation on haze pollution, and identifies the specific mechanisms involved; (2) in terms of methodologies, the study employs a spatial self-lag model and constructs an asymmetric logistics matrix; (3) the study investigates the micro-mechanism involved, to reveal the intermediate action of technological innovation and industrial structure; (4) it is shown that the results are robust after using the instrumental variable (promotion pressure of government officials) for environmental regulation. The policy implications are: Environmental regulation in the Yangtze River Delta region still needs to make a trade-off between economic development and environmental pollution, but the good news is that the convergence of environmental regulation can help promote environmental improvement, and the rigorization of environmental regulation can help optimize industrial structure, and talent cultivation is conducive to the formation and strengthening of the neighbor-companion effect of environmental regulation. • Employ spatial econometrics to explore environmental regulation and haze pollution. • Find relations between environmental regulation and haze pollution is “inverted-U”. • Haze pollution in the Yangtze River Delta represents a neighbor beggar mode. • Environmental regulation and haze pollution also show neighbor-companion mode. • Different environmental regulations have different mechanisms on haze pollution.