Unlocking the dual benefits: Economic and ecological impacts of China's National Key Ecological Function Areas

Protected areas have become one of the most important tools for ecosystem restoration, yet their multiple benefits have not been fully recognized. This study focuses on the multiple benefits of China's most influential protected areas policies—the National Key Ecological Function Areas (NKEFAs). Using multiple county-level datasets in China, we employ the staggered Difference-in-Differences method to empirically examine the economic and ecological impacts of NKEFAs. Our findings show that the establishment of NKEFAs significantly promotes local economic growth and ecological conservation, with these benefits intensifying over time. Mechanism analysis reveals that spatial agglomeration, economies of scale, industrial structure optimization, and ecological fiscal transfers are crucial drivers in achieving dual benefits. Furthermore, NKEFAs accelerates economic growth in poverty-stricken areas, though regions with high human activity face challenges in achieving ecological improvements. We also highlight the differences in impact between types of ecological function, with areas designated for windbreak and sand fixation, and water source conservation, struggling to achieve dual benefits. This study elucidates the dual benefits of NKEFAs, demonstrating their significant role in promoting both economic growth and ecological conservation, which contributes to the understanding of protected areas as tools for ecosystem restoration.