Research on the impact of environmental regulation on high-quality economic development
Abstract
This study investigates how environmental regulation (envir) affects high-quality economic development using panel data from 278 Chinese prefecture-level cities over 2005–2023. Unlike prior work, this paper quantitatively compares three mediating pathways, green technological innovation (GTI), industrial structure rationalization (ISR), and industrial structure upgrading (ISU), within a unified mediation framework. The results show that envir’s impact operates almost entirely through indirect channels. GTI acts as a crucial mediator, transmitting 91.7% of the total effect, making it the strongest and most policy-responsive pathway. ISR functions at 61.3% transmission, while ISU operates at only 18.9% transmission. Regional heterogeneity corresponds to the marginal regulatory effectiveness gradient. The positive effect is strongest in the western region, insignificant in the central region, and negative (though not significant) in the eastern region. Policy implications are that environmental policies should prioritize green innovation incentives, complemented by structural rationalization, while adopting region-specific stringency levels to avoid diminishing returns.