IDEAS home Printed from https://ideas.repec.org/a/gam/jijerp/v20y2023i3p2679-d1055401.html
   My bibliography  Save this article

Watershed Horizontal Ecological Compensation Policy and Green Ecological City Development: Spatial and Mechanism Assessment

Author

Listed:
  • Xinwen Lin

    (Department of Development Studies, Faculty of Business and Economics, Universiti Malaya, Kuala Lumpur 50603, Malaysia)

  • Angathevar Baskaran

    (Department of Development Studies, Faculty of Business and Economics & UM North–South Research Centre, Universiti Malaya, Kuala Lumpur 50603, Malaysia
    SARChI (Innovation Studies), Tshwane University of Technology, Pretoria 0183, South Africa)

  • Yajie Zhang

    (Department of Economics and Management, Sanming Medical and Polytechnic Vocational College, Sanming 365000, China)

Abstract

Green ecological development has become an inevitable choice to achieve sustainable urban development and carbon neutrality. This paper evaluates the level of green ecological city development in the Xin’an watershed as measured by green total factor productivity ( GTFP ), analyzes the direct and spatial effects of the Watershed Horizontal Ecological Compensation policy on GTFP , and further examines the moderating effect of the Research and Development ( R&D ) incentives, industrial structure, and income gap. This paper conducts difference-in-differences (DID) and spatial regression analysis on 27 cities from 2007 to 2019. The results show that GTFP progresses to varying degrees across cities over time, especially in the pilot cities. Crucially, the Watershed Horizontal Ecological Compensation policy significantly improved GTFP , although the effect was slight. Interestingly, the increase in GTFP in pilot cities that implemented the policy spatially suppressed the increase in GTFP in cities that did not implement the policy. Our evidence also shows that the positive effect of the policy is higher in regions with higher R&D incentives and industrial structure upgrading, which indicates that R&D incentives and industrial upgrading are crucial. In comparison, the income gap has not made the expected negative adjustment effect under the Chinese government’s poverty alleviation policy. However, the positive policy effect is heterogeneous in the downstream and upstream pilot cities. The “forcing effect” of the policy on the downstream cities is more favorable than the “compensating effect” on the upstream cities. Therefore, policymakers should pay more attention to ensuring the effectiveness of the Watershed Horizontal Ecological Compensation policy in enhancing GTFP as a long-term strategy to guarantee the sustainability of green ecological development in Chinese cities.

Suggested Citation

  • Xinwen Lin & Angathevar Baskaran & Yajie Zhang, 2023. "Watershed Horizontal Ecological Compensation Policy and Green Ecological City Development: Spatial and Mechanism Assessment," IJERPH, MDPI, vol. 20(3), pages 1-21, February.
    • Handle: RePEc:gam:jijerp:v:20:y:2023:i:3:p:2679-:d:1055401
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1660-4601/20/3/2679/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1660-4601/20/3/2679/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Wu, Xianhua & Deng, Huai & Li, Hua & Guo, Yiming, 2021. "Impact of Energy Structure Adjustment and Environmental Regulation on Air Pollution in China: Simulation and Measurement Research by the Dynamic General Equilibrium Model," Technological Forecasting and Social Change, Elsevier, vol. 172(C).
    2. Petia Topalova, 2010. "Factor Immobility and Regional Impacts of Trade Liberalization: Evidence on Poverty from India," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 1-41, October.
    3. Wunder, Sven, 2008. "Payments for environmental services and the poor: concepts and preliminary evidence," Environment and Development Economics, Cambridge University Press, vol. 13(3), pages 279-297, June.
    4. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 605-654.
    5. Liu, Yansui & Zhou, Yang, 2021. "Reflections on China's food security and land use policy under rapid urbanization," Land Use Policy, Elsevier, vol. 109(C).
    6. Hao Wang & Sander Meijerink & Erwin van der Krabben, 2020. "Institutional Design and Performance of Markets for Watershed Ecosystem Services: A Systematic Literature Review," Sustainability, MDPI, vol. 12(16), pages 1-26, August.
    7. Ouyang, Xiaoling & Li, Qiong & Du, Kerui, 2020. "How does environmental regulation promote technological innovations in the industrial sector? Evidence from Chinese provincial panel data," Energy Policy, Elsevier, vol. 139(C).
    8. Wang, Hui & Han, Jiaying & Su, Min & Wan, Shulin & Zhang, Zhenchao, 2021. "The relationship between freight transport and economic development: A case study of China," Research in Transportation Economics, Elsevier, vol. 85(C).
    9. Ning Ma & Puyu Liu & Yadong Xiao & Hengyun Tang & Jianqing Zhang, 2022. "Can Green Technological Innovation Reduce Hazardous Air Pollutants?—An Empirical Test Based on 283 Cities in China," IJERPH, MDPI, vol. 19(3), pages 1-20, January.
    10. Chenrui Lu & Bing Wang & Tinggui Chen & Jianjun Yang, 2022. "A Document Analysis of Peak Carbon Emissions and Carbon Neutrality Policies Based on a PMC Index Model in China," IJERPH, MDPI, vol. 19(15), pages 1-16, July.
    11. Yang, Qiuyue & Gao, Da & Song, Deyong & Li, Yi, 2021. "Environmental regulation, pollution reduction and green innovation: The case of the Chinese Water Ecological Civilization City Pilot policy," Economic Systems, Elsevier, vol. 45(4).
    12. Shili Guo & Xian Deng & Jiaxuan Ran & Xiangyu Ding, 2022. "Spatial and Temporal Patterns of Ecological Connectivity in the Ethnic Areas, Sichuan Province, China," IJERPH, MDPI, vol. 19(19), pages 1-22, October.
    13. Zhang, MunkhDalai A. & Borjigin, Elles & Zhang, Huiping, 2007. "Mongolian nomadic culture and ecological culture: On the ecological reconstruction in the agro-pastoral mosaic zone in Northern China," Ecological Economics, Elsevier, vol. 62(1), pages 19-26, April.
    14. Tang, Jianjun & Gong, Jiaowei & Ma, Wanglin & Rahut, Dil Bahadur, 2022. "Narrowing urban–rural income gap in China: The role of the targeted poverty alleviation program," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 74-90.
    15. Jinlin Li & Litai Chen & Ying Chen & Jiawen He, 2022. "Digital economy, technological innovation, and green economic efficiency—Empirical evidence from 277 cities in China," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(3), pages 616-629, April.
    16. Cenjie Liu & Chunbo Ma & Rui Xie, 2020. "Structural, Innovation and Efficiency Effects of Environmental Regulation: Evidence from China’s Carbon Emissions Trading Pilot," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 75(4), pages 741-768, April.
    17. Li, Zhimin & Pan, Yanchun & Yang, Wen & Ma, Jianhua & Zhou, Ming, 2021. "Effects of government subsidies on green technology investment and green marketing coordination of supply chain under the cap-and-trade mechanism," Energy Economics, Elsevier, vol. 101(C).
    18. Lu, Shibao & Lu, Wenjing & Shao, Wei & Xue, Yangang & Taghizadeh-Hesary, Farhad, 2021. "The transboundary ecological compensation construction based on pollution rights: Ways to keep the natural resources sustained," Resources Policy, Elsevier, vol. 74(C).
    19. Helena Cotler & Maria Luisa Cuevas & Rossana Landa & Juan Manuel Frausto, 2022. "Environmental Governance in Urban Watersheds: The Role of Civil Society Organizations in Mexico," Sustainability, MDPI, vol. 14(2), pages 1-26, January.
    20. Sheng, Jichuan & Han, Xiao, 2022. "Practicing policy mobility of payment for ecosystem services through assemblage and performativity: Lessons from China's Xin'an River Basin Eco-compensation Pilot," Ecological Economics, Elsevier, vol. 191(C).
    21. William W. Cooper & Lawrence M. Seiford & Kaoru Tone, 2006. "Introduction to Data Envelopment Analysis and Its Uses," Springer Books, Springer, number 978-0-387-29122-2, December.
    22. Miller, Stephen M. & Upadhyay, Mukti P., 2002. "Total factor productivity and the convergence hypothesis," Journal of Macroeconomics, Elsevier, vol. 24(2), pages 267-286, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhice Cheng & Xinyuan Chen & Huwei Wen, 2022. "How Does Environmental Protection Tax Affect Corporate Environmental Investment? Evidence from Chinese Listed Enterprises," Sustainability, MDPI, vol. 14(5), pages 1-22, March.
    2. Guo, Bingnan & Hu, Peiji & Lin, Ji, 2024. "The effect of digital infrastructure development on enterprise green transformation," International Review of Financial Analysis, Elsevier, vol. 92(C).
    3. Wang, Xiaoling & Zhang, Tianyue & Nathwani, Jatin & Yang, Fangming & Shao, Qinglong, 2022. "Environmental regulation, technology innovation, and low carbon development: Revisiting the EKC Hypothesis, Porter Hypothesis, and Jevons’ Paradox in China's iron & steel industry," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    4. Zhou, Ying & Jia, Nan & Yang, Tianchi, 2021. "The quantity–quality trade-off related to investment in healthy human capital: New evidence from the implementation of the “selective two-child policy” in China," Journal of Asian Economics, Elsevier, vol. 76(C).
    5. Gu, Guangtong & Zheng, Haorong & Tong, Lingyun & Dai, Yaxian, 2022. "Does carbon financial market as an environmental regulation policy tool promote regional energy conservation and emission reduction? Empirical evidence from China," Energy Policy, Elsevier, vol. 163(C).
    6. Shen, Qiong & Pan, Yuxi & Meng, Xiangxu & Ling, Xiao & Hu, Shilei & Feng, Yanchao, 2023. "How does the transition policy of mineral resource-exhausted cities affect the process of industrial upgrading? New empirical evidence from China," Resources Policy, Elsevier, vol. 86(PB).
    7. Zhao, Qian & Ding, Longfei & Pirtea, Marilen Gabriel & Vǎtavu, Sorana, 2023. "Does technological innovation bring better air quality?," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 978-990.
    8. Gao, Kang & Yuan, Yijun, 2022. "Does market-oriented reform make the industrial sector “Greener” in China? Fresh evidence from the perspective of capital-labor-energy market distortions," Energy, Elsevier, vol. 254(PA).
    9. Hegde, Ravi & Bull, Gary Q., 2011. "Performance of an agro-forestry based Payments-for-Environmental-Services project in Mozambique: A household level analysis," Ecological Economics, Elsevier, vol. 71(C), pages 122-130.
    10. Zhou, Di & Qiu, Yuan & Wang, Mingzhe, 2021. "Does environmental regulation promote enterprise profitability? Evidence from the implementation of China's newly revised Environmental Protection Law," Economic Modelling, Elsevier, vol. 102(C).
    11. Zhengke Du & Chengcheng Zhu & Yuxin Zhou, 2022. "Increasing Quantity or Improving Quality: Can Soil Pollution Control Promote Green Innovation in China’s Industrial and Mining Enterprises?," Sustainability, MDPI, vol. 14(22), pages 1-19, November.
    12. Maohui Ren & Tao Zhou & Di Wang & Chenxi Wang, 2023. "Does Environmental Regulation Promote the Infrastructure Investment Efficiency? Analysis Based on the Spatial Effects," IJERPH, MDPI, vol. 20(4), pages 1-24, February.
    13. Liang Li & Yanghong Wang & Meixuen Tan & Huaping Sun & Bangzhu Zhu, 2023. "Effect of Environmental Regulation on Energy-Intensive Enterprises’ Green Innovation Performance," Sustainability, MDPI, vol. 15(13), pages 1-21, June.
    14. Pham, Van Truong & Roongtawanreongsri, Saowalak & Ho, Thong Quoc & Tran, Phuong Hanh Niekdam, 2021. "Can payments for forest environmental services help improve income and attitudes toward forest conservation? Household-level evaluation in the Central Highlands of Vietnam," Forest Policy and Economics, Elsevier, vol. 132(C).
    15. Wanli Zhang & Bin Zhu & Yongling Li & Dan Yan, 2024. "Revisiting the Porter hypothesis: a multi-country meta-analysis of the relationship between environmental regulation and green innovation," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-15, December.
    16. Xin Nie & Jianxian Wu & Han Wang & Lihua Li & Chengdao Huang & Weijuan Li & Zhuxia Wei, 2022. "Booster or Stumbling Block? The Role of Environmental Regulation in the Coupling Path of Regional Innovation under the Porter Hypothesis," Sustainability, MDPI, vol. 14(5), pages 1-20, March.
    17. Andrea Pufahl & Christoph R. Weiss, 2009. "Evaluating the effects of farm programmes: results from propensity score matching," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 36(1), pages 79-101, March.
    18. Wen-Min Lu & Qian Long Kweh & Chung-Wei Wang, 2021. "Integration and application of rough sets and data envelopment analysis for assessments of the investment trusts industry," Annals of Operations Research, Springer, vol. 296(1), pages 163-194, January.
    19. Christian Growitsch & Tooraj Jamasb & Christine Müller & Matthias Wissner, 2016. "Social Cost Efficient Service Quality: Integrating Customer Valuation in Incentive Regulation—Evidence from the Case of Norway," International Series in Operations Research & Management Science, in: Joe Zhu (ed.), Data Envelopment Analysis, chapter 0, pages 71-91, Springer.
    20. Ellison, Richard B. & Ellison, Adrian B. & Greaves, Stephen P. & Sampaio, Breno, 2017. "Electronic ticketing systems as a mechanism for travel behaviour change? Evidence from Sydney’s Opal card," Transportation Research Part A: Policy and Practice, Elsevier, vol. 99(C), pages 80-93.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jijerp:v:20:y:2023:i:3:p:2679-:d:1055401. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.