Nexus among air pollution, enterprise development and regional industrial structure upgrading: A China's country panel analysis based on satellite retrieved data

Abstract

China's development model of relying on heavy industry has brought huge environmental costs. Serious haze pollution has posed a threat to high-quality economic development and people's healthy life. Exploring the relationship between air pollution and industrial development and promoting the coordinated governance of economy and environment has become an important task in China's new era. Based on the satellite inversion PM2.5 concentrate data and micro industrial enterprise data in China's county-level areas, this paper uses the instrumental variable and two-stage least square (2SLS) method to test the impact of regional air pollution (RAP) on the regional industrial structure upgrading (RISU), and further reveals its impact mechanism. The results show that: (1) RAP has a negative impact on the RISU, and the introduction of instrumental variable and 2SLS method can overcome the endogenous problem of regression. (2) on average, for every 1% increase in PM2.5 concentration, the regional industrial structure height will decrease by 2%. (3) RAP hinders the RISU by affecting enterprises' fixed assets investment and innovation activities. And the sensitivity of innovation activities of state-owned enterprises to RAP is lower than that of other ownership enterprises. According to the research of this paper, some pertinent policies and suggestions are proposed to provide new decision-making basis for national policymakers.