Regional coordinated development and green transformation: Evidence from major national strategic zones

Abstract

Major National Strategic Zones (MNSZ) play a crucial role in China's Regional coordinated development (RCD), and achieving a win-win situation between RCD and comprehensive green transformation is essential for promoting high-quality economic growth. This paper empirically investigates the green transformation effect and its underlying mechanism in MNSZ, utilizing data from Chinese industrial enterprises and pollution records, along with key variables from government work reports (GWR). The findings reveal an “inverted U” curve relationship between RCD and comprehensive green transformation, suggesting that green transformation is a phased outcome of the RCD strategy, with a less significant long-term effect in MNSZ. These results hold strong under various endogeneity, robustness, and externality tests. The mechanism analysis highlights that local governments can enhance the effectiveness of green transformation in MNSZ through human capital investment, financial market improvement, and policy adjustment. However, the time lag effect of policy adjustment after crossing the inflection point and the market's self-selection effect hinder comprehensive green transformation. To address these challenges, improving human resources and the capital market while reducing the welfare loss of policy adjustments will strengthen the long-term facilitation effect of green transformation. This study offers valuable empirical evidence for the optimal implementation of regional development strategies in China and other developing countries.