Environmental Regulation, Environmental Knowledge Spillover, and Regional Economic Growth in China: An Empirical Test Based on the Spatial Durbin Model

Abstract

Considering the evolution of the spatial pattern of regional economic growth in China, this paper analyzes whether environmental regulation (ER) and environmental knowledge spillover (EKS) contribute to regional economic growth using panel data and the spatial Durbin model of China’s 31 provinces and cities from 2005 to 2020. The findings indicate that (1) there are significant characteristics of economic agglomeration in the spatial distribution of economic growth in China’s different provinces and cities according to the Moran’s index; (2) the environmental regulation has a nonlinear “U”-shaped effect on the regional economic growth, which is first suppressed and then promoted, and the spatial effect presents the same “U” shape as that of the local effect; (3) the environmental knowledge spillover, as measured by the number of green patents, shows a positive contribution on the economic growth and is significantly active in terms of both the local spillover and inter-regional spillover; (4) Eastern China enjoys a larger ER dividend than the central and western regions, and EKS shows a significant positive contribution to economic growth in the eastern, central, and western regions; (5) other factors also influence the regional economic growth besides the core explanatory variables, including the research and development expenditure (RD), human capital (Edu), urbanization level (Urb), government intervention (Gov), and opening-up level (Open), all of which show a positive effect on the economic growth, whereas the science and technology expenditure (Ti) has not played a positive role in promoting economic growth.