The Spatial Spillover Effects of Environmental Regulation on China’s Industrial Green Growth Performance

Abstract

This study investigated the spatial spillover effects of environmental regulation (ER) on industrial green growth performance (IGGP) in China. Firstly, a parametric stochastic frontier analysis (SFA) was estimated to measure IGGP using the data of China’s 30 provincial industry sectors during 2000–2014. Then, considering the space–time characteristics in IGGP, the spatial spillover effects of three types of ER, namely, administrative environmental regulation (AER), market-based environmental regulation (MER), and voluntary environmental regulation (VER), on IGGP was examined by employing spatial Durbin model (SDM). The main findings are: (1) the IGGP is low but shows a trend of continuous improvement and there is a significant disparity and spatial autocorrelations amongst regions; (2) the spillover effects of the three types of ER are different, specifically, the spillover effects of AER are significant negative, while the effects of MER and VER are both significant positive. The difference between the latter two is that the positive spillover effect of MER on IGGP is so large to outperform the negative direct effect, while the effect of VER is very minor. Based on these findings, relevant policy suggestions are presented to balance industrial economic and environmental protection in order to promote IGGP.