Will Environmental Regulation Narrow the Gap in Regional Economic Growth?

Abstract

Empirical studies have shown that China's Air Pollution Prevention and Control Law (APPCL2000), as an environmental regulation, has significantly alleviated the air pollution problem and improved the TFP of air polluting enterprises. However, few scholars have studied the regional heterogeneity of this policy. To study this issue, this manuscript introduces the "Hu Line" from the perspective of regional resource endowment differences and divides China into a resource advantage area (A area) and a resource disadvantage area (B area). Subsequently, this manuscript uses the triple difference model and big data of Chinese industrial enterprises to verify. The results show that under environmental regulations, the TFP of air polluting enterprises in B area has increased more than in A area, and the rapid decline in the proportion of low-efficiency air polluting enterprises in B area is the main mechanism. It shows that environmental regulation is beneficial to narrow the gap of regional economic growth and realize economic catch-up in resource-disadvantaged areas.