How Market-Oriented Environmental Regulation Impacts the Bamboo Industry in China

Abstract

In recent years, stricter environmental rules have affected the entire bamboo industry in China. The increased costs for managing environmental issues hinder the growth of the bamboo forest harvesting and transportation sector in the upstream part of the industry chain. Analyzing how environmental changes affect the entire bamboo industry can give a deeper understanding of the regional transfer within the bamboo industry in China, and it can give more experience to the bamboo industry in developing countries. This study, based on the Pollution Haven Hypothesis and the theory of externalities, collected panel data from 16 provinces in China from 2000 to 2020 and examined the discrepancies in bamboo industry development and the varying intensities of market-oriented environmental regulation (MER). By constructing a fixed effects model and employing econometric methods, this study analyzed the spatiotemporal impact of MER on the output value of the bamboo harvesting and transportation industry (BHTI) and explored whether MER is a crucial factor causing the transfer of the bamboo industry across regions. The findings indicate that there is a noticeable shift of BHTI from the eastern to the central and western regions. Additionally, there is a substantial adverse effect of MER on the BHTI output value, especially in the eastern region. This confirms the transfer of industries between regions, which is a novel contribution of this article. Based on the findings of this study, some recommendations have been given for the response to the environmental regulation for bamboo industries in the future.