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Academic Journal of Business & Management, 2023, 5(9); doi: 10.25236/AJBM.2023.050917.

Environmental Regulation and Regional Industrial Transformation and Upgrading: A DID Test Based on the "Two Control Zones" Policy


Jiajun Guo, Juan Liang

Corresponding Author:
Juan Liang

Institute of Economy, Beijing Wuzi University, Beijing, China


Based on the "two control zones" policy, this paper selects the panel data of Chinese prefecture-level cities and national patent data from 1994 to 2005, and establishes a DID model to explore the impact of environmental regulation on regional industrial transformation and upgrading from the city level. It is found that environmental regulation significantly promotes the transformation and upgrading of regional industries, and this conclusion is consistent in a series of robustness tests. Further study shows that the policy effect of environmental regulation has regional heterogeneity, that is, it significantly promotes the industrial transformation and upgrading in the eastern and central regions, but has no significant impact on the western and northeastern regions. Meanwhile, the mechanism study finds that environmental regulation promotes the transformation and upgrading of regional industries through technological innovation rather than capital investment.


environmental regulation; industrial transformation and upgrading; “two control zones” policy

Cite This Paper

Jiajun Guo, Juan Liang. Environmental Regulation and Regional Industrial Transformation and Upgrading: A DID Test Based on the "Two Control Zones" Policy. Academic Journal of Business & Management (2023) Vol. 5, Issue 9: 110-115. https://doi.org/10.25236/AJBM.2023.050917.


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