Non-linear Characteristics of Environmental Regulation's Impact on China's Green Economic Efficiency

Non-linear Characteristics of Environmental Regulation's Impact on China's Green Economic Efficiency


Author:Qi Hongqian,Chen Miao Journal:The Journal of Quantitative Economics Date:2018,9(2)

Abstract: Environmental regulation is an important factor affecting the green economic efficiency. This paper estimates the environmental regulation intensity and green economic efficiency of China’s 30 provinces (autonomous regions and municipalities) from 2006 to 2015 based on the Synthetic Index Method and the DEA-Malmquist model. The Panel Smooth Threshold Regression (PSTR) Model is used to analyze the impact of environmental regulation on green economic efficiency in China. The results show that the intensity of environmental regulation in the east, central, and west regions of China increased sequentially, while the growth rate of green economy efficiency declined in turn. On the whole, the green economic efficiency in our country shows an inverted “U” trend with the environmental regulation intensity. After exceeding the threshold of environmental regulation intensity of 0. 5995, the impact of environmental regulation on green economic efficiency has changed from promotion to suppression. Judging from the control variables, the impact of industrial structure on green economic efficiency changes from negative to positive after exceeding the threshold of environmental regulation intensity, the degree of openness to the outside world has an opposite effect on the green economic efficiency, the optimization of industrial structure complements the development of foreign trade. Therefore, for the reasonable implementation of China’s environmental regulation and the improvement of the green economic efficiency, the government should adopt different policies based on the status of environmental regulation, the industrial structure, and the degree of openness to the outside world in the east, central and west regions of China.

Key words: Environmental Regulation  Green Economic Efficiency  PSTR Model  Regional Differences


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