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The impact of environmental regulations and foreign direct investment on industrial structure upgrading

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  • Zhao, Yuanping
  • Shen, Chunfeng
  • Han, Cheng

Abstract

This study investigates the influence of environmental regulations, foreign direct investment (FDI), and their interplay on the advancement of industrial structure, utilizing panel data from 284 prefectural-level cities spanning the years 2008 to 2021. The findings reveal that both environmental regulations and FDI exert individual effects on the industrial structure, while also jointly imposing a notable negative impact through their interaction. Furthermore, heterogeneity analysis demonstrates that these effects are more pronounced in the eastern region. Additionally, it is observed that environmental regulations significantly contribute to the upgrading of the industrial structure by fostering an increase in the number of green patents awarded.

Suggested Citation

  • Zhao, Yuanping & Shen, Chunfeng & Han, Cheng, 2025. "The impact of environmental regulations and foreign direct investment on industrial structure upgrading," Finance Research Letters, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:finlet:v:76:y:2025:i:c:s1544612325002685
    DOI: 10.1016/j.frl.2025.107004
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    References listed on IDEAS

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