IDEAS home Printed from https://ideas.repec.org/a/spr/endesu/v23y2021i8d10.1007_s10668-020-01114-0.html
   My bibliography  Save this article

Positive or negative externalities? Exploring the spatial spillover and industrial agglomeration threshold effects of environmental regulation on haze pollution in China

Author

Listed:
  • Yihang Zhao

    (Shanghai Jiao Tong University)

  • Chen Liang

    (Shanghai Jiao Tong University)

  • Xinlong Zhang

    (Technische Universität Dresden)

Abstract

As one of the efficacious environmental governance instruments, environmental regulations usually have been adopted to control haze pollution in most developing countries. However, as proved in recent researches, the relationship between environmental regulation and haze pollution remains uncertain. This paper develops a conceptual model and attributes this phenomenon to two reasons: the spatial spillover effect and industrial agglomeration threshold effect of effective environmental regulation. Spatial durbin model (SDM), instrumental variable (IV) and panel threshold model are used to estimate these effects based on 277 cities data in China from 2012 to 2016. The results confirm the spatial spillover effects of environmental regulations and haze pollution, which could influence the pollutant reduction effect through positive and negative spatial spillover effects. It also validates the thresholds of industrial agglomeration of approximately 0.818 and 1.271. Nevertheless, only 1.271 represents the turning point of the environmental regulation effect changing and environmental regulations could significantly reduce haze, only if it exceeds this numerical value. Moreover, the results have regional heterogeneity regarding spillover effect and threshold effect as well. The environmental regulation intensity in central and western regions plays a “multi-stage promotion” role on haze pollution emission with the adjustment of industrial agglomeration threshold, while it turns out to be a “triple-stage downward” trend in eastern China. At last, we put forward differential policies suggestions according to their industrial agglomeration levels.

Suggested Citation

  • Yihang Zhao & Chen Liang & Xinlong Zhang, 2021. "Positive or negative externalities? Exploring the spatial spillover and industrial agglomeration threshold effects of environmental regulation on haze pollution in China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(8), pages 11335-11356, August.
    • Handle: RePEc:spr:endesu:v:23:y:2021:i:8:d:10.1007_s10668-020-01114-0
    DOI: 10.1007/s10668-020-01114-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10668-020-01114-0
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10668-020-01114-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dong Guo & Satyajit Bose & Kristina Alnes, 2017. "Employment implications of stricter pollution regulation in China: theories and lessons from the USA," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 19(2), pages 549-569, April.
    2. Chen, Yvonne Jie & Li, Pei & Lu, Yi, 2018. "Career concerns and multitasking local bureaucrats: Evidence of a target-based performance evaluation system in China," Journal of Development Economics, Elsevier, vol. 133(C), pages 84-101.
    3. Hansen, Bruce E., 1999. "Threshold effects in non-dynamic panels: Estimation, testing, and inference," Journal of Econometrics, Elsevier, vol. 93(2), pages 345-368, December.
    4. Allen Blackman & Zhengyan Li & Antung A. Liu, 2018. "Efficacy of Command-and-Control and Market-Based Environmental Regulation in Developing Countries," Annual Review of Resource Economics, Annual Reviews, vol. 10(1), pages 381-404, October.
    5. Nie, Huihua & Jiang, Minjie & Wang, Xianghong, 2013. "The impact of political cycle: Evidence from coalmine accidents in China," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 995-1011.
    6. Junsong Wang & Xinyue Ye & Yehua Dennis Wei, 2019. "Effects of Agglomeration, Environmental Regulations, and Technology on Pollutant Emissions in China: Integrating Spatial, Social, and Economic Network Analyses," Sustainability, MDPI, vol. 11(2), pages 1-20, January.
    7. Matthew A. Cole & Robert J. R. Elliott & Per G. Fredriksson, 2006. "Endogenous Pollution Havens: Does FDI Influence Environmental Regulations?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(1), pages 157-178, March.
    8. Ruoyu Yang & Weidong Chen, 2019. "Spatial Correlation, Influencing Factors and Environmental Supervision on Mechanism Construction of Atmospheric Pollution: An Empirical Study on SO 2 Emissions in China," Sustainability, MDPI, vol. 11(6), pages 1-13, March.
    9. Bommer, Rolf, 1999. "Environmental Policy and Industrial Competitiveness: The Pollution-Haven Hypothesis Reconsidered," Review of International Economics, Wiley Blackwell, vol. 7(2), pages 342-355, May.
    10. David Hitchens & Esmond Birnie & William Thompson & Ursula Triebswetter & Paolo Bertossi & Luciano Messori, 2000. "Environmental Regulation and Competitive Advantage," Books, Edward Elgar Publishing, number 1996.
    11. Juan Lin & Zhou Yu & Yehua Dennis Wei & Mingfeng Wang, 2017. "Internet Access, Spillover and Regional Development in China," Sustainability, MDPI, vol. 9(6), pages 1-18, June.
    12. Jing Lan & Makoto Kakinaka & Xianguo Huang, 2012. "Foreign Direct Investment, Human Capital and Environmental Pollution in China," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 51(2), pages 255-275, February.
    13. Chung, Sunghoon, 2014. "Environmental regulation and foreign direct investment: Evidence from South Korea," Journal of Development Economics, Elsevier, vol. 108(C), pages 222-236.
    14. Costantini, Valeria & Mazzanti, Massimiliano & Montini, Anna, 2013. "Environmental performance, innovation and spillovers. Evidence from a regional NAMEA," Ecological Economics, Elsevier, vol. 89(C), pages 101-114.
    15. Zhou, Qian & Shao, Qinglong & Zhang, Xiaoling & Chen, Jie, 2020. "Do housing prices promote total factor productivity? Evidence from spatial panel data models in explaining the mediating role of population density," Land Use Policy, Elsevier, vol. 91(C).
    16. Gupta, Manash Ranjan & Barman, Trishita Ray, 2009. "Fiscal policies, environmental pollution and economic growth," Economic Modelling, Elsevier, vol. 26(5), pages 1018-1028, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yihang Zhao & Jing Xiong & De Hu, 2023. "Reputation, Network, and Performance: Exploring the Diffusion Mechanism of Local Governments’ Behavior during Inter-Governmental Environmental Cooperation," Land, MDPI, vol. 12(7), pages 1-17, July.
    2. Mei Song & Yujin Gao & Furong Dong & Yunan Feng, 2023. "Research on the Spatial Spillover Effect of Industrial Agglomeration on the Economic Growth in the Yellow River Basin," Sustainability, MDPI, vol. 15(5), pages 1-20, February.
    3. Yueyang Zhao & Jinzhou Mao & Yueshan Li, 2022. "Local governments’ environmental emphasis and corporate green innovation: evidence from China," Economic Change and Restructuring, Springer, vol. 55(4), pages 2577-2603, November.
    4. Xu, Ye & Wen, Shuang & Tao, Chang-Qi, 2023. "Impact of environmental tax on pollution control: A sustainable development perspective," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 89-106.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Junsong Wang & Xinyue Ye & Yehua Dennis Wei, 2019. "Effects of Agglomeration, Environmental Regulations, and Technology on Pollutant Emissions in China: Integrating Spatial, Social, and Economic Network Analyses," Sustainability, MDPI, vol. 11(2), pages 1-20, January.
    2. Imad Moosa, 2019. "The Environmental Effects of FDI: Evidence from MENA Countries," Working Papers 1321, Economic Research Forum, revised 21 Aug 2019.
    3. Dong, Yan & Tian, Jinhuan & Wen, Qiang, 2022. "Environmental regulation and outward foreign direct investment: Evidence from China," China Economic Review, Elsevier, vol. 76(C).
    4. Solarin, Sakiru Adebola & Al-Mulali, Usama & Musah, Ibrahim & Ozturk, Ilhan, 2017. "Investigating the pollution haven hypothesis in Ghana: An empirical investigation," Energy, Elsevier, vol. 124(C), pages 706-719.
    5. Shi Wang & Wen Zhang & Hua Wang & Jue Wang & Mu-Jun Jiang, 2021. "How Does Income Inequality Influence Environmental Regulation in the Context of Corruption? A Panel Threshold Analysis Based on Chinese Provincial Data," IJERPH, MDPI, vol. 18(15), pages 1-18, July.
    6. Bu, Maoliang & Li, Shuang & Jiang, Lei, 2019. "Foreign direct investment and energy intensity in China: Firm-level evidence," Energy Economics, Elsevier, vol. 80(C), pages 366-376.
    7. Assad Ullah & Xinshun Zhao & Muhammad Abdul Kamal & Jiajia Zheng, 2022. "Environmental regulations and inward FDI in China: Fresh evidence from the asymmetric autoregressive distributed lag approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 1340-1356, January.
    8. Zhonghua Cheng & Lianshui Li & Jun Liu, 2018. "The spatial correlation and interaction between environmental regulation and foreign direct investment," Journal of Regulatory Economics, Springer, vol. 54(2), pages 124-146, October.
    9. Lutao Ning & Fan Wang, 2018. "Does FDI Bring Environmental Knowledge Spillovers to Developing Countries? The Role of the Local Industrial Structure," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(2), pages 381-405, October.
    10. Po Kou & Ying Han & Xiaoyuan Qi & Yuanxian Li, 2022. "Does China's policy of carbon emission trading deliver sulfur dioxide reduction co-benefits?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(5), pages 6224-6245, May.
    11. Wang, Qian & Zhu, Linke, 2021. "Environmental regulation, firm heterogeneity, and intra-industry reallocation," China Economic Review, Elsevier, vol. 68(C).
    12. Jiangfeng Hu & Zhao Wang & Qinghua Huang & Xiaoqin Zhang, 2019. "Environmental Regulation Intensity, Foreign Direct Investment, and Green Technology Spillover—An Empirical Study," Sustainability, MDPI, vol. 11(10), pages 1-15, May.
    13. Opoku, Eric Evans Osei & Dogah, Kingsley E. & Aluko, Olufemi Adewale, 2022. "The contribution of human development towards environmental sustainability," Energy Economics, Elsevier, vol. 106(C).
    14. Ge, Tao & Li, Chunying & Li, Jinye & Hao, Xionglei, 2023. "Does neighboring green development benefit or suffer from local economic growth targets? Evidence from China," Economic Modelling, Elsevier, vol. 120(C).
    15. Yuqing Ge & Yucai Hu & Shenggang Ren, 2020. "Environmental Regulation and Foreign Direct Investment: Evidence from China’s Eleventh and Twelfth Five-Year Plans," Sustainability, MDPI, vol. 12(6), pages 1-18, March.
    16. Lin Ni & Lei Li & Xin Zhang & Huwei Wen, 2022. "Climate Policy and Foreign Direct Investment: Evidence from a Quasi-Experiment in Chinese Cities," Sustainability, MDPI, vol. 14(24), pages 1-19, December.
    17. Wen Jun & Muhammad Zakaria & Syed Jawad Hussain Shahzad & Hamid Mahmood, 2018. "Effect of FDI on Pollution in China: New Insights Based on Wavelet Approach," Sustainability, MDPI, vol. 10(11), pages 1-20, October.
    18. Natalia Zugravu-Soilita, 2017. "How does Foreign Direct Investment Affect Pollution? Toward a Better Understanding of the Direct and Conditional Effects," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(2), pages 293-338, February.
    19. Vona, Francesco, 2023. "Skills and human capital for the low-carbon transition in developing and emerging economies," FEEM Working Papers 338778, Fondazione Eni Enrico Mattei (FEEM).
    20. Yi Li & Lili Ding & Yongliang Yang, 2020. "Can the Introduction of an Environmental Target Assessment Policy Improve the TFP of Textile Enterprises? A Quasi-Natural Experiment Based on the Huai River Basin in China," Sustainability, MDPI, vol. 12(4), pages 1-19, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:endesu:v:23:y:2021:i:8:d:10.1007_s10668-020-01114-0. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.