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Environmental Regulation, Roundabout Production, and Industrial Structure Transformation and Upgrading: Evidence from China

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  • Hanxiao Wei

    (School of Economics and Management, Northwest University, Xi’an 710127, China)

  • Huiqin Yao

    (School of Economics and Management, Northwest University, Xi’an 710127, China)

Abstract

By dividing the production process into technical processes and procedural processes, this paper supplements the theoretical connotation of production roundaboutness, and analyzes and discusses the micro impact mechanisms of environmental regulation on industrial structure through production roundaboutness. Subsequently, based on the panel data of 31 provinces and cities in China from 2003 to 2017, a panel threshold model was adopted to empirically analyze the impact of environmental regulation, the synergy of environmental regulation, and roundabout production on the transformation and upgrading of industrial structures. The result shows there is a single threshold effect of environmental regulation on the upgrading and transformation of industrial structures based on the threshold variable of production roundaboutness. As well as the continuous increase in production roundaboutness, significant positive correlations between environmental regulation and the transformation and upgrading of industrial structures gradually vanish. However, the synergistic growth of environmental regulation and production roundaboutness is significantly and negatively correlated with industrial structure transformation and upgrade. Investment in social fixed assets has a positive incentive effect on industrial structure transformation and upgrade, while government expenditure, foreign trade, and opening-up have different degrees of inhibition on it. In order to speed up the transformation and upgrading of industrial structures under environmental and resource constraints, it is necessary to straighten out the relationship between environmental regulation and roundabout production, and to promote the scientific development of both.

Suggested Citation

  • Hanxiao Wei & Huiqin Yao, 2022. "Environmental Regulation, Roundabout Production, and Industrial Structure Transformation and Upgrading: Evidence from China," Sustainability, MDPI, vol. 14(7), pages 1-17, March.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:7:p:3810-:d:778066
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