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Do Double-Edged Swords Cut Both Ways? The Role of Technology Innovation and Resource Consumption in Environmental Regulation and Economic Performance

Author

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  • Qian Zhou

    (Economics School, Zhongnan University of Economics and Law, Nanhu Avenue 182, Wuhan 430073, China)

  • Meng Shi

    (Department of International Cooperation, China National Academy of Governance, Dayouzhuang 100, Beijing 100091, China)

  • Qi Huang

    (Zhengzhou Central Sub-Branch of People’s Bank of China, Shangwu Road 20, Zhengzhou 450000, China)

  • Tao Shi

    (Department of International Cooperation, China National Academy of Governance, Dayouzhuang 100, Beijing 100091, China
    Economics Institute, Henan Academy of Social Science, Fengchan Road 21, Zhengzhou 450002, China)

Abstract

The Guangdong–Hong Kong–Macao Greater Bay Area (GBA) is one of the significant regions with the strongest economic vitality in China. This study focuses on environmental regulation in the eleven Greater Bay Area cities to explore the relationship between it and economic performance for the period 2000–2016. In doing so, we employ spatial panel models (including the spatial instrumental variable method) to investigate the nonlinear relationship between economic growth and environmental regulation. We confirm the existence of a U-shaped relationship between economic growth and environmental regulation in the Greater Bay Area. In the first half of the inverted U shape, the higher the economic development level, the stronger the environmental regulation strength; however, the latter begins to decrease after the peak point. The doubled-edged sword does not cut both ways. This paper verifies that technology innovation and resource consumption are two important mechanisms. Further, we find that both economic growth and environmental regulation have negative spatial externalities; innovation has a positive impact on the environmental regulation of the local city as well as surrounding cities, while resource consumption is on the contrary. In conclusion, this paper provides policy recommendations to further promote economic growth and environmental technologies, and to enhance energy efficiency in GBA.

Suggested Citation

  • Qian Zhou & Meng Shi & Qi Huang & Tao Shi, 2021. "Do Double-Edged Swords Cut Both Ways? The Role of Technology Innovation and Resource Consumption in Environmental Regulation and Economic Performance," IJERPH, MDPI, vol. 18(24), pages 1-21, December.
    • Handle: RePEc:gam:jijerp:v:18:y:2021:i:24:p:13152-:d:701568
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    References listed on IDEAS

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