Abstract
Regional cooperation between cities is of great importance to economic development and environmental protection. However, there appear to be fewer papers in the economic literature on the actual result of cooperation between cities quantitatively. Therefore, this paper, theoretically, studies how local governments strategically interact with each other in improving environmental quality and local economy. To this end, we, specifically, collect data before building a fixed effects model and adopting instrumental variables. Empirical evidence shows that inter-city cooperation in the Greater Bay Area has a positive impact on local economy and environment. This paper provides insightful comments on the economic and environmental effects of cooperation between cities, which is of great relevance to government, enterprises, and residents. We substantially advance the understanding of the impact of inter-city cooperation, which benefits the regional cooperation in China further.
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