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The threshold effect of environmental regulation on the green transition of the industrial economy in China

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  • Huijun Li
  • Bo Li

Abstract

The goal of environmental regulation is to simultaneously achieve a win–win situation of economic growth and environmental quality. Based on the Porter hypothesis and panel data from 2001 to 2011, this study conducts empirical research on the intensity of environmental regulation and industrial green transformation in China. The results indicate that environmental regulation can effectively promote industrial green transformation by improving green total factor productivity (G.T.F.P.). But there is no simple linear relationship between the two. And there is a threshold effect, that is, the degree of influence of environmental regulation on industrial green transformation can change with the change of threshold value. Therefore, government policy should not focus only on the environmental regulation intensity, which cannot efficiently improve the G.T.F.P., or accelerate the green transition process. Instead, government should adopt different environmental policies in different industrial sectors.

Suggested Citation

  • Huijun Li & Bo Li, 2019. "The threshold effect of environmental regulation on the green transition of the industrial economy in China," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 32(1), pages 3134-3149, January.
    • Handle: RePEc:taf:reroxx:v:32:y:2019:i:1:p:3134-3149
    DOI: 10.1080/1331677X.2019.1661001
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    Cited by:

    1. Lijuan Su & Yating Zheng & Fayyaz Ahmad & Ilhan Ozturk & Yatao Wang & Tian Tian & Abdul Rehman, 2023. "Environmental Regulations and Chinese Energy Sustainability: Mediating Role of Green Technology Innovations in Chinese Provinces," Sustainability, MDPI, vol. 15(11), pages 1-23, June.
    2. Wang, Hong & Hu, Xuechen & Li, Hailing, 2023. "Regional production restriction policy and firms’ green transition: Evidence from Beijing-Tianjin-Hebei region," Energy, Elsevier, vol. 282(C).
    3. Qiang Wang & Xinhua Wang & Rongrong Li, 2024. "Geopolitical risks and energy transition: the impact of environmental regulation and green innovation," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-22, December.
    4. Škare, Marinko & Porada-Rochoń, Małgorzata, 2023. "Are we making progress on decarbonization? A panel heterogeneous study of the long-run relationship in selected economies," Technological Forecasting and Social Change, Elsevier, vol. 188(C).

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